Oil hits 26-month high, settles lower

Benchmark oil for February delivery rose as high as $92.66 a barrel, $1.28 above Friday’s settlement price, on the New York Mercantile Exchange. It gave up most of those gains to settle 17 cents higher at $91.55. The last time oil settled above $92 a barrel was on Oct. 3, 2008.

At the pump, the national average for regular gasoline was $3.07 a gallon, according to AAA. That was 3 cents more than it was a week ago and about 41 cents higher than a year ago.

Drivers in Illinois, California, and New York are paying some of the highest prices, ranging from $3.15 to $3.67 a gallon. The cheapest gas is largely in the Rocky Mountains, South Carolina, and Missouri, at $2.81 to $2.92 a gallon.

Oil has been gaining ground on speculation that the global economy will continue to grow. Many analysts expect oil to reach at least $100 a barrel this year, which would mean higher prices for gasoline, diesel, and heating oil.

“The biggest problem with 2011 is that there are very few easily identifiable reasons why oil prices might move lower for any extended period — other than a renewed recession,’’ Cameron Hanover said in a research report. Most economists don’t think that is likely.

Positive economic data and surging stock markets pushed oil and gas prices higher yesterday.

In other Nymex trading in February contracts, heating oil gained 1.04 cents to settle at $2.5528 a gallon.

Gasoline fell 0.3 cent to settle at $2.4273 per gallon.

Natural gas gained 24.5 cents to settle at $4.650 per 1,000 cubic feet.

In London, the price of Brent crude rose 9 cents to settle at $94.84 a barrel on the ICE Futures exchange.