Oil rises on higher economic growth expectation

The Commerce Department Thursday raised its estimate for U.S. economic growth to an annual rate of 2.7 percent in the summer quarter of this year. That's much higher than the 2 percent rate estimated a month ago and more than twice the 1.3 percent rate in the three previous months.

Also Thursday The National Association of Realtors said its seasonally adjusted pending home sales index rose in October to its highest level in nearly six years.

Any sign the economic recovery is picking up can be a catalyst for energy prices.

Benchmark crude rose $1.58 to close at $88.07.

Falling prices at the gas pump could also drive Americans to spend more money on other things, like holiday gifts, further fueling the economy. The national average for a gallon of regular has been inching lower and is now $3.41. That is down about 12 cents from a month ago — although still higher than a year ago.