2008 energy spike

COLUMBUS, Ohio — Oil prices pushed to new highs for the year Monday on a weak dollar and new data suggesting manufacturing in China has strengthened. Both of those factors helped send energy prices to record highs last year.

The national average price at the pump this weekend rose above $2.50 for the first time since October.

Benchmark crude for July delivery rose $2.27 to settle at $68.58 a barrel on the New York Mercantile Exchange, the highest close since early November. Natural gas futures soared 10 percent.

The data out of China shows how much economic news from around the globe can affect pocketbooks in the U.S.

Brokerage CLSA Asia-Pacific Markets said its purchasing managers index rose to 51.2 from April’s 50.1 on a 100-point scale, indicating that the world’s third-largest economy might be recovering from a slump. Numbers above 50 show an expansion. The state-sanctioned China Federation of Logistics and Purchasing reported that its index had eased.

When crude prices were heading toward $150 per barrel last year, many energy analysts believed the booming economies of China and India would support energy prices globally even as Western nations slipped into recession. That did not turn out to be the case and there is little tangible evidence to suggest that the rapid rise in energy prices can be sustained for long this summer.

That would be good news for some consumers as far as energy prices go. Utility bills and gasoline prices are far below last year’s levels, though the plunge has come at the cost of millions of jobs.


Looking for reasons
Yet the pace at which energy prices rose in May has also raised questions about what is causing the surge. One reason may be found in the number of large speculative positions taken on Nymex.
The net increase in bets that benchmark crude prices will increase rose by more than 14 percent last week, according to a Commodity Futures Trading Commission report. Still, there are continuing hints of an economy that may be on the mend.

Natural gas prices have slumped to five-year lows with some of the biggest users hammered by the recession. Monday, natural gas futures jumped more than 7 percent.


by the associated press