Oil ended the day below $83 a barrel on Friday, finishing down about 4 percent for the week, on fears that another recession could cut demand for energy.
Benchmark West Texas Intermediate crude for September delivery fell 12 cents to finish at $82.26 per barrel on the New York Mercantile Exchange after earlier rising as high as $83.55 per barrel. Stocks also started the day with gains but the major indexes ended down more than 1 percent, posting their fourth straight week of losses as uncertainty about the global economy continued.
Benchmark crude remains well above its lowest point in the past year. It finished at $71.63 a barrel last Aug. 24.
Still, oil has been falling since April and lower prices will likely mean 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.
Gas could be around $3.25 a gallon by Labor Day and may 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 almost $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.
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. Oil lost some ground by the end of the day as the dollar got a little stronger.
In other Nymex trading for September contracts, heating oil rose 2.97 cents to finish at $2.9045 per gallon and gasoline futures added 5.08 cents to end at $2.8412 per gallon. Natural gas rose 4.8 cents to finish at $3.940 per 1,000 cubic feet.
In London, Brent crude rose $1.63 to end the day at $108.62 per barrel on the ICE Futures exchange.