Oil prices rose Monday after the government said consumers spent more in July, easing concerns about another recession.
It was the latest in a series of reports indicating the economy improved last month, which could strengthen demand for oil and gasoline.
Benchmark oil rose $1.91, or 2.3 percent, to $87.28 per barrel in New York. Brent crude, used to price international varieties, increased $1.11 to $112.47 per barrel in London.
The Commerce Department said July consumer spending increased by the biggest amount in five months. Consumer spending accounts for 70 percent of the nation's economic activity.
The report is an encouraging sign about the economy despite weak demand for gasoline, PFGBest analyst Phil Flynn said.
"The consumers may be saying they're not that confident, but their spending is telling a different story," he said.
Energy analyst Jim Ritterbusch cautioned not to read too much into one report. A batch of economic news is expected this week that could provide a clearer picture of where the economy is headed -- including unemployment numbers and manufacturing activity.
At the pump, gasoline was virtually unchanged Monday at a national average of $3.61 per gallon, according to AAA, Wright Express and the Oil Price Information Service. That's about 4 cents more than a week ago and 93 cents more than a year ago.
In the Buffalo Niagara region, a gallon of regular averaged $3.78 Monday, down 1 cent from a week ago.