The price of oil inched up closer to $88 a barrel Tuesday as investors were encouraged by robust retail sales in the U.S. ahead of the Christmas holiday and a deal in Europe to give Greece a new batch of bailout funds.
By early afternoon in Europe, benchmark oil for January delivery was up 18 cents to $87.92 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 54 cents to close at $87.74 a barrel on the Nymex on Monday.
Holiday shopping in the U.S. got off to a brisk start over the four-day Thanksgiving weekend — spending over the four-day weekend totaled $59.1 billion, up 12.8 percent from 2011.
Carl Larry of Oil Outlooks and Opinions said all that gift-buying bodes well for energy demand, which in turn pushes up prices.
"All of these goods being purchased start out at point A and eventually have to get to point B. That means more cargo jets, more trucks delivering good to stores and more consumers driving to get to them," Larry said in a market commentary.
Traders were also relieved that negotiations over the next installment on Greece's bailout proved successful. Greece will get some €44 billion ($75 billion) after negotiators from the eurozone and the International Monetary Fund came together on a long-term deal to reduce the country's debt load. For its part, Greece must implement additional austerity measures and reforms even as it faces rising poverty and unemployment levels.