Front-month crude settled at $89.11 a barrel Friday, a 48-cent drop from the previous day.
The decline stems largely from concerns about increasing oil inventories. The U.S. Department of Energy's Energy Information Administration (EIA) reported Thursday that the country's commercial crude oil stocks rose by 2.6 million barrels last week, reversing a downward trend that had been evident for the preceding six weeks.
Also influencing the direction of oil prices Friday's was speculation that China's government will soon hike interest rates. Intended to control inflation, the move also would dampen demand for oil and other commodities. March crude oil peaked at $90.22 and bottomed out at $88.77. Using Tuesday's settlement as a benchmark, oil is down 2.5 percent for the holiday-shortened trading week.
Natural gas, meanwhile, continued to surge Friday. Thanks in part to a frigid weather outlook for the Midwest and Northeast, February natural gas gained 4.5 cents to end the day at $4.74 per thousand cubic feet.
In addition, the EIA revealed that working gas in underground storage in the Lower 48 states had fallen 8.2 percent week-on-week as of January 14, 2011.
Natural gas traded within a range from $4.64 to $4.78 Friday. Since Tuesday's settlement, it rose 7.1 percent.
February gasoline gained four cents to settle at $2.46 a gallon. It fluctuated from $2.42 to $2.47, and it is up 0.8 percent since Tuesday.
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