Oil prices fell below $88 Friday after the government reported that the U.S. economy continues to add jobs, although not at the pace many experts had hoped for.
The economy added 103,000 jobs in December and figures for October and November were revised upward. More jobs means more cars will join the morning commute, which should boost gasoline consumption in the U.S., experts said.
Those who are commuting are paying the highest price for gas in the month of January since paying around $3.11 a gallon on this date in 2008. The national average is now about $3.083 per gallon.
That's because oil prices rose 22 percent from Labor Day through the end of the year. Although oil prices declined this week, they did hit a two-year high on the first day of trading in 2011. And pump prices still went up a penny. Despite the drop in oil, many experts think the price of a barrel will surpass $100 this year. And gas prices generally rise between the start of the year and Memorial Day.
Benchmark crude for February delivery declined $1.10 to $87.28 per barrel on the New York Mercantile Exchange.
Retail pump prices added less than a penny overnight to a new national average of $3.083 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 11.5 cents more expensive than the same time last month and 37.4 cents higher than it was last year.
OPIS said that if gasoline follows historic trends, then they should rise to more than $4 per gallon in at least 15 states by Memorial Day.
In other Nymex trading for February contracts, heating oil fell 3.95 cents to $2.4775 and gasoline futures dropped 4.15 cents to $2.4015 per gallon. Natural gas gave up 6 cents to $4.374 per 1,000 cubic feet. In London, Brent crude lost 49 cents at $94.03 per barrel.