A brighter outlook for U.S. homebuilders and rising industrial production pushed the price of oil higher Tuesday for the fifth straight day.
Benchmark U.S. crude added 79 cents to end the day at $89.22 per barrel in New York. Brent crude, which is used to set the price of oil imported into the U.S., rose by 63 cents to end at $104 per barrel in London.
A survey by the housing industry showed that confidence among homebuilder soared to a five-year high on the expectation that new home sales will rise this year. Home building is a key part of the economic recovery. Every time a new home is built, it creates three jobs for a year and generates about $90,000 in tax revenue, according to the National Association of Home Builders.
Meanwhile, U.S. industrial production rose in June. The Federal Reserve said factories made more cars, machines and business equipment. The manufacturing industry has struggled to maintain steady growth this year, but analysts said the news was enough to ease concerns about a slowing economy.
"The economy looks a little better today," said Phil Flynn with Price Futures Group.
Oil prices were down earlier in the day after Fed Chairman Ben Bernanke gave lawmakers a dour outlook for the economy. Investors had hoped that Bernanke would discuss a new stimulus plan before the Senate Banking Committee. He didn't. Instead, Bernanke warned that the country could be headed for another recession, if Congress doesn't avert a looming budget crisis.
At the pump, gasoline prices rose by a penny to a national average of $3.406 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular has fallen by an average of 53 cents since peaking this year in April.
On this day in 2008, gasoline prices hit an all-time average high of $4.1144 per gallon. Some experts had predicted earlier this year that the national average would beat that this summer, but that's now unlikely. Tom Kloza, OPIS chief oil analyst, expects gasoline prices to range between $3.30 and $3.50 per gallon from now until Labor Day.
In other futures trading, heating oil rose 1.45 cents to finish at $2.8422 per gallon, while wholesale gasoline lost a penny to end at $2.8450 per gallon. Natural gas fell by less than a penny to finish the day at $2.7960 per 1,000 cubic feet.
Follow Chris Kahn on Twitter at http://twitter.com/ChrisKahnAP