Oil prices hit 8-month high

NEW YORK — Oil prices hit an eight-month high as the dollar fell and reports suggested that consumers and business may be more willing and able to spend money on energy.

Benchmark crude for July delivery rose $1.35 to settle at $72.68 on the New York Mercantile Exchange.

In London, Brent prices added 99 cents to settle at $71.79 a barrel on the ICE Futures exchange.

Crude prices rose sharply in the morning after the federal government announced a drop in first-time jobless claims last week. Another report said retail sales grew in May for the first time in three months, in part because of spiking gasoline prices.


Experts see demand
Gasoline prices are following crude upward, even though most energy experts can find no solid basis for either.
"I still think we have a better chance of seeing $40 (per barrel of crude) than we do $80, but I’ve been saying that all along and maybe I’m desperately wrong,” said Peter Beutel of Cameron Hanover. "We’re more overbought that we were last year.”

In the summer of 2008, crude prices neared $150 per barrel before prices crashed. Crude traded below $33 per barrel before the year was over.

On Thursday, the International Energy Agency in Paris said that the slump in global oil demand in 2009 would be slightly less severe than previously expected. The organization revised its demand estimate upward for the first time in 10 months.

The IEA said in its monthly survey that global oil demand would fall by 2.9 percent to 83.3 million barrels a day this year. In today’s environment, even that is seen as good news. In May, the organization was expecting a 3 percent annual fall in demand, the sharpest rate of decline since 1981.

Oil markets have surged largely because of investor fears that massive fiscal stimulus spending could weaken the U.S. currency. The euro climbed to $1.4127 Thursday from 1.399 the previous day. Commodities can be used as a hedge against a falling dollar.

Retail gas prices added a half cent overnight to a new national average of $2.632 a gallon, according to AAA, Wright Express and Oil Price Information Service. Gas is 38.4 cents a gallon more expensive than last month.

Meanwhile, the Energy Department’s Energy Information Administration said natural gas stockpiles jumped last week.

A large natural gas inventory is a sign that the country is using less energy as manufacturers curtail operations.



by the associated press