There are signs that the economy may have bottomed out, which could mean energy demand will bounce back.
Yet the speed at which crude and gasoline prices are rising has raised concern that the added burden for consumers and business could quash the very recovery that oil investors anticipate.
Benchmark crude for December delivery added 54 cents to $80.14 a barrel on the New York Mercantile Exchange. In London, Brent crude for December delivery rose 55 cents to $78.66 on the ICE Futures exchange.
Crude prices have increased since the summer despite large petroleum supplies and a drop in American driving.
One big part of rising oil prices is the value of the dollar. Oil is traded in U.S. currency, and as the dollar falls, oil gets cheaper for investors holding euros and other strong international currencies.
Later Wednesday, the U.S. Federal Reserve will release a statement on interest rates. Interest rates, which have a heavy influence on the dollar, are expected to be left unchanged near zero, though the language in the Fed statement will be parsed for any hints about the health of the economy and how soon rates might be increased.
Benefits outsourcer Automatic Data Processing Inc. said in a report Wednesday that fewer jobs were lost in October than September.
Meanwhile, analysts expect the government will say Wednesday that oil inventories grew last week, though a survey by American Petroleum Institute showed that crude stockpiles dropped.
Investors also have been pumping money into oil contracts on the expectation that Americans will start driving more as the economy recovers.
OPEC isn't "telling you that oil is a good buy at these prices," analyst Stephen Schork said. "The only people who are telling you that oil is worth $85 (a barrel) is Wall Street."
At the pump, retail gasoline prices slid overnight by less than a penny to $2.684 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 22.3 cents more expensive than last month and 29.3 cents more expensive than a year ago.
In other Nymex trading, heating oil rose less than a penny to $2.0757 a gallon. Gasoline for December delivery advanced 1.16 cents to $2.012 a gallon. Natural gas for December fell 6.3 cents to $4.859 per 1,000 cubic feet.
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Associated Press writers Pablo Gorondi in Budapest, Hungary and Alex Kennedy in Singapore contributed to this report.
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