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NEW YORK — Oil prices dipped below $79 a barrel Wednesday as the dollar strengthened and the government said the nation’s crude supply shrank less than expected.

Still, a strong run-up in crude prices this month has begun to tug the cost of gasoline higher. Since Monday Dec. 21, crude futures have risen 10 percent and retail gasoline prices appear to be catching up.

Pump prices jumped 1.5 cents overnight to a new national average of $2.623 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service.

Gas prices began to tick higher over the weekend and are now on the longest upward streak since October. It’s still a penny cheaper than last month.

There is more demand for gasoline, too, up 1 percent over the past four weeks compared with last year. That increased consumption comes even though a gallon of gas costs about $1 more than it did last year.

That is partly due to a late surge in buying as people filled up cars and snow blowers before a major storm hit the Northeast this month.

Benchmark crude for February delivery gave up 7 cents to $78.80 a barrel on the New York Mercantile Exchange. In London, Brent crude for February delivery fell by a penny to $77.63 a barrel on the ICE Futures exchange.

Prices dropped after the Energy Information Administration said crude supplies shrank by 1.5 million barrels last week. Analysts were expecting a drop of 2.2 million barrels.

Futures contracts for natural gas and heating oil have increased this month, also because of the winter storms.

Still, crude has been held in check by a rally in the dollar.

Contracts for benchmark crude are priced in U.S. currency, and as the dollar rises, the contracts become tougher to buy for investors holding foreign money. On Wednesday, the dollar hit a three-month high to the yen and grew by 0.42 percent to the euro in morning trading.

In other Nymex trading, heating oil and gasoline for January delivery both added less than a penny to $2.108 and $2.017 a gallon, respectively. Natural gas for February delivery was climbed 2.6 cents to $5.866 per 1,000 cubic feet.

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