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Oil ending the week lower, pointing to lower gas pump prices
AP () ' ' Oil traded around $83 a barrel on Friday, finishing down nearly 4 percent for the week. That could spell more relief at the gas pump.
The national average for retail gasoline is $3.59 a gallon, according to AAA, Wright Express and Oil Price Information Service. That's down 10 percent from this year's high of $3.98 on May 5.
Analysts expect the national average for gas will be around $3.25 a gallon by Labor Day and could drop as low as $3.15 by the end of the year, according to Fred Rozell, OPIS retail pricing director.
While gas may be headed lower, it's still taking a big piece out of household income. The median U.S. household income before taxes is about $50,000 a year. In July families spent about $374 a month on gasoline, or around 9 percent of household income, according to Rozell. For the year, monthly gas expenses average about 8.4 percent, compared with 6.7 percent in 2010.
Benchmark West Texas Intermediate crude for September delivery rose 30 cents to $82.68 per barrel in afternoon trading on the New York Mercantile Exchange after earlier falling as low as $79.17 per barrel. In London, Brent crude rose $1.79 to $108.78 per barrel on the ICE Futures exchange.
Oil is still well above its lowest point in the past year. It finished at $71.63 a barrel last Aug. 24.
PFGBest analyst Phil Flynn thinks traders may have overreacted after oil fell nearly 6 percent Thursday on a batch of negative economic news. He called Friday's trading a "nervous rally," and said traders will remain guarded until there is more clarity about where the economy may be headed.
Crude got some support Friday from a weaker dollar, which hit a new post-World War II low against the Japanese yen. Oil and other commodities are priced in dollars, so a weaker dollar makes them cheaper for traders who use other currencies.
In other Nymex trading for September contracts, heating oil rose 4 cents to $2.9148 per gallon and gasoline futures added 5 cents at $2.8343 per gallon. Natural gas rose 5 cents to $3.938 per 1,000 cubic feet.