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 "It suggests that concerns about the economy ... are overblown a little bit," said Michael Lynch, president of Strategic Energy and Economic Research Inc., in Winchester, Mass.
Oil futures added to their gains late Friday when the British Foreign Office said the U.N. Security Council has agreed to draft a new sanctions resolution that could be passed in November if Iranian cooperation with the International Atomic Energy Agency does not improve. Investors worry that any conflict between the West and Iran would disrupt oil supplies from the Middle East.
Light, sweet crude for December delivery rose $2.44 to settle at a record $95.93 a barrel on the New York Mercantile Exchange after rising as high as $96.05 earlier, short of a trading record of $96.24 set Thursday. On Thursday, oil prices retreated from that early record to close down more than $1, in part because of dismal reports on consumer spending and industrial activity that also factored into the Dow Industrial's 362-point decline.
Crude prices are within the range of inflation-adjusted highs set in early 1980. Depending on the how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.
At the pump, meanwhile, gas prices jumped 2.9 cents overnight to a national average of $2.942 a gallon, according to AAA and the Oil Price Information Service. Gas prices have risen nearly 19 cents since mid-October.
Analysts say gas prices are rising to catch up with oil prices, which have jumped 39 percent since late August. But low demand for gasoline will keep prices from rising above $3 again this year, many analysts say. Gas prices peaked for the year at $3.227 a gallon in late May.
Refinery problems contributed to Friday's gains. Operations at a 172,000 barrel-per-day Petroplus Holdings AG refinery in England are expected to be limited for a month due to a fire earlier this week. And Chevron Corp. said Friday its 330,000 barrel-per-day refinery in Pascagoula, Miss., will run at reduced rates until early next year due to an August fire.
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 December gasoline rose 9.63 cents to settle at $2.4395 a gallon on the Nymex, and December heating oil rose 6.14 cents to settle at $2.5737 a gallon.
Also supporting prices Friday, Secretary of State Condoleezza Rice told Turkish officials the U.S. views Kurdish rebels based in northern Iraq as a "common threat" that the United States would help fight. Investors have sent oil prices sharply higher in recent weeks in part on concerns that a Turkish incursion into Iraq in search of Kurdish rebels would cut oil supplies from Northern Iraq.
Additionally, investors already concerned about falling oil supplies and imports received word that Hurricane Noel may have disrupted some oil shipments this week. And analysts said OPEC production increases that began Thursday have been hampered by maintenance at some Middle Eastern oil fields.
The confluence of headlines fueled fears that there will be fourth quarter shortages of oil and other petroleum products.
"I think people ... are worried about the fourth quarter (supply and demand) balance," Lynch said.
"We've got some colder weather finally coming into the Northeast," Andrew Lebow, senior vice president at MF Global Inc. in New York.
Meanwhile, the dollar dipped to a new record low against the euro on Friday. Oil futures offer a hedge against a weak dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling.
"The major trend of weak dollar and strong oil prices continues," Lebow said.
Also on the Nymex Friday, December natural gas fell 21.9 cents to settle at $8.418 per 1,000 cubic feet as investors sold to lock in profits from Thursday's 30.7-cent rally.
In London, December Brent crude rose $2.36 to settle at a record $92.08 a barrel on the ICE Futures exchange.
[Associated Press; By JOHN WILEN]
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