Oil prices up 11 percent in 2 weeks.
Oil prices continued to rise Friday as a refinery strike in France and worries over Iran's nuclear program suggested petroleum supplies may tighten in the future. Benchmark crude added 32 cents to $79.38 a barrel on the New York Mercantile Exchange. Oil prices have increased more than 11 percent in the past two weeks.
Energy prices dipped overnight after the Federal Reserve announced that it will bump up the so-called "discount" lending rate. That sent the dollar to its highest level since May. Crude, which is priced in U.S. currency, tends to fall in price as the dollar rises and makes oil barrels tougher to buy for investors holding foreign money.
A Labor Department report Friday morning though said consumer prices excluding food and energy fell in January for the first time since December 1982. That tempered concerns of future inflation, analyst Phil Flynn said.
Meanwhile, investors continued to focus on protesting refinery workers in France. Workers at a refinery for oil giant Total have been striking since Jan. 12. The U.S. imports gasoline and other fuels from Europe, and continued disruptions have helped push energy prices higher.
Also, the United Nations' International Atomic Energy Agency said Thursday that Iran may be working on a nuclear warhead, raising concerns about a military build up in the region and the availability of oil supplies from the Persian Gulf.
"The fear of Iran has always been instrumental in the price run-ups of 2007 and 2008, fueling the 'what-if' scenarios that are necessary for bull runs and this year might not be different," said analyst Olivier Jakob of Petromatrix in Switzerland.
At the pump, retail gasoline prices increased for the second day this week, adding less than a penny overnight for a national average of $2.623 a gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 11.4 cents cheaper than a month ago and 67.4 cents more expensive than a year ago.
In other Nymex trading in March contracts, heating oil rose less than a penny to $2.0543 a gallon, and gasoline added 1.56 cents to $2.0848 a gallon. Natural gas gave up 14.6 cents to $5.026 per 1,000 cubic feet.
In London, Brent crude fell 6 cents at $77.72 on the ICE futures exchange.