Energy prices are ending the year on an upswing with large storms, falling supplies, a weak dollar and a slightly better employment picture sending futures higher.
Crude futures closed above $78 per barrel for the first time in more than a month Thursday in shortened holiday trading as the government reported that unemployment benefit claims from newly laid-off workers fell for the 16th straight week.
Yet there are few signs that demand has increased, meaning that any price hikes felt by consumers may be temporary.
Oil prices climbed 6 percent on the week, though stabilizing economy hasn't seriously dented huge stores of crude, natural gas and gasoline. Even with a 5 million barrel draw on crude reported Wednesday by the government, supplies remain well above normal.
The amount of crude at Cushing, Okla., where crude traded on the New York Mercantile Exchange is stored, is very close record highs.
Gasoline prices still spike in places, but not because of increasing consumption. A number of gas stations in Maryland ran out of gas recently, but only because owners saw wholesale prices plunging so they waited to buy more.
Then a winter storm hit, cutting off deliveries.
The economy remains fragile and save for an occasional jump in consumption during holidays, people are not buying gasoline and other fuels in large quantities. Even distillates, which include heating oil, remain at historically high levels despite winter storms in the Northeast and Midwest.
Industrial demand for natural gas is extremely weak. The government said Thursday that natural gas in storage fell by a less-than-expected 166 billion cubic feet to 3.4 trillion cubic feet. Gas in storage is 13 percent above the five-year average.
Natural gas futures plunged 3 percent on the news.
Refineries that convert oil to fuel are slowing their purchases of crude drastically. Over the past two weeks the amount of crude going into refineries is down 144,000 barrels each day.
Analysts Stephen Schork says Wall Street trading firms may be buying oil contracts in large numbers, but refineries are shutting down because they can't turn a profit buying crude.
This year, refineries have shut down in California, New Jersey, New Mexico and most recently in Delaware City, Del.
"Demand to import and refine crude oil by the guys who import and refine crude oil will remain low into the first quarter," Schork said. "Bottom line, there are no refineries in lower Manhattan, but there used to be one in Delaware City."
With millions of people packing up cars and traveling, retail gasoline prices remain flat. The average price for a gallon of gas is $2.584, according to auto club AAA, Wright Express and Oil Price Information Service. Prices are a nickel lower than a month ago and far from the peak reached in late October close to $2.70.
Still, a better job picture helped push energy futures higher Thursday before the long holiday weekend.
Benchmark crude for February delivery rose nearly 2 percent, or $1.38 to settle at $78.05 on the Nymex.
In other Nymex trading in January contracts, heating oil rose 2.38 cents to settle at $2.0356 while gasoline rose 2.3 cents to settle at $1.9896. Natural gas tumbled 17.8 cents to settle at $5.643 per 1,000 cubic feet.
In London, Brent crude for February delivery rose 86 cents to settle at $76.31 on the ICE Futures exchange.
Associated Press writers Pablo Gorondi in Budapest and Alex Kennedy in Singapore contributed to this report.