Oil rises in quiet trading to cap turbulent year

COLUMBUS, Ohio — Oil prices jumped above $44 per barrel on the last day of 2008, wrapping up what has been the most turbulent year ever for crude markets in which crude gave up four years of gains in just five months.

It may be a temporary spike.

An unprecedented collapse in energy prices that began in July came as the world's leading economies sank into recession.

Gasoline prices have been more than halved from summer peaks above $4, giving consumers some relief as millions of people lose jobs and companies freeze hiring. Not even gas prices of $1.35 per gallon in some parts of the country have been enough to spur demand as Americans ride out what could become the worst economic downturn since World War II.

Light, sweet crude for February delivery on New Year's Eve jumped nearly 13 percent, or $5, to $44.03 a barrel on the New York Mercantile Exchange with trading volumes low. The contract overnight fell 99 cents to $39.03.

Prices rose in thin trading after the government reported that U.S. refineries ran at 82.5 percent of total capacity on average for the week ended Friday, a drop of 2.2 percent from the prior week and below analysts' expectations that it would remain flat.

Some refiners shut operations at the end of the year for repairs, meaning that demand could outstrip supply in a few weeks, said Peter Beutel of Cameron Hanover.

Gasoline futures, a refined crude product, jumped more than 15 percent Wednesday.

Oil had been rising steadily since 2002 when it hit a trough of $17.85. Prices jumped 57 percent in 2007 to $95.98 a barrel. Prices increased rapidly 2008, fueled by speculation that soaring growth from China, India and other emerging economies would outpace demand for crude. A a weaker dollar helped drive up prices to a record $147.27 a barrel on July 11 as investors dumped investments in the U.S. currency for oil.

Prices, which many industry analysts described as out of control, tumbled in July as a credit crisis in the U.S. mushroomed into a global slump in consumer spending and industrial production. Earlier this month, crude on the New York Mercantile Exchange went for $33.87, the cheapest pricetag on a barrel of oil in almost five years.

Not even hurricanes Gustav and Ike in the Gulf of Mexico in September or the Middle East conflict between Israel and Hamas has been able to stop crude's slide.