NEW YORK (AP) — Oil prices wavered Friday as the US said its economy grew faster than previously estimated in the fourth quarter of last year while a financial crisis in Portugal raised concerns that another European country will need a bailout.

Against the backdrop of disruptions to oil supplies from Libya, uncertainty in Japan and a new economic worry for Europe, traders have been looking for indications of how strong the US economy is. Reports out this week were a mixed bag.

The US said home construction has nearly come to a halt and that companies trimmed orders for long-lasting manufactured goods. Yet gasoline demand keeps rising despite higher prices — a gallon of gas costs about 49 cents more than it did at the start of the year.

On Friday, the Commerce Department reported that the economy grew at an annual rate of 3.1 per cent from October to December, up from last month’s estimate of 2.8 per cent. At the same time, some economists have trimmed their estimates for growth in the current quarter, concerned that high gas prices will force consumers to cut spending elsewhere.

“We’re waiting to see the economic recovery put down roots,” Cameron Hanover analyst Peter Beutel said. “But you can find something bullish and bearish just about everywhere you look.”

Benchmark West Texas Intermediate oil for May delivery settled 20 cents lower at $105.40 a barrel on the New York Mercantile Exchange.

Prices dropped just before trading opened on the Nymex. Traders said they were looking for signs that Portugal’s European neighbors could help its struggling economy. The yield on Portugal’s 10-year bond rose to a level that suggests the country may not be able to finance its debt. The European Union previously bailed out Greece and Ireland when debts became too burdensome.

The US dollar also gained against foreign currencies. Oil is priced in the US currency, so a decline makes oil more expensive for investors holding foreign currency.

PFGBest analyst Phil Flynn added that news of a suspected breach on the damaged Fukushima Dai-ichi power plant in Japan also is weighing down oil prices. An escalation of the nuclear crisis could slow down the country’s efforts to rebuild after the March 11 earthquake and tsunami, he said. The Japanese prime minister called the situation “very grave and serious.”

“People are asking how bad this really is,” Flynn said.