Despite drop in oil prices, gas prices rise again

Oil prices flirted with five-year lows Thursday as unemployment benefit claims rose and OPEC cut demand expectations for 2009. Any belief that energy prices had bottomed out were wiped away early in the day as crude plumbed new lows for the year and more government data suggested the economy may be worsening. Light, sweet crude for February delivery fell 5%, or $1.88, to $35.40 a barrel Thursday on the New York Mercantile Exchange. At one point prices fell as low as $33.20. Crude prices have fallen so fast, the cost for retail gasoline has yet to catch up. Pump prices nudged up again overnight, but they’re likely to fall. Prices at the pump rose overnight from $1.792 to $1.7999 a gallon, according to auto club AAA, the Oil Price Information Service and Wright Express. A gallon of gasoline one year ago cost $3.05. An oil industry report Thursday showed just how much energy use eroded over the past year. For all of 2008, U.S. petroleum deliveries—a measure of demand—fell 6% to 19.4 million barrels a day, with declines for all major products made from crude, according to the American Petroleum Institute.