Oil rises above $70 on weaker dollar
NEW YORK — Energy prices climbed higher Thursday despite massive petroleum surpluses as the dollar got weaker and equities markets rose.
Benchmark crude for November delivery added $2.02 to trade at $71.59 on the New York Mercantile Exchange. In London, Brent crude gained $2.86 to $70.06 on the ICE Futures exchange.
Natural gas, gas futures and heating oil also jumped in morning trading.
“It amazes me,” Dan Flynn, an analyst with PFGBest, said. “With all the supply we have, we are way overpriced.”
The Energy Information Administration said this week that the country continues to sit on massive surpluses of petroleum. Oil and gas stockpiles are well above average, and distillate fuels have grown to their highest level since January 1983.
Natural gas supplies have ballooned to their highest level on record. The EIA said Thursday that stockpiles continued to grow in underground caverns last week, climbing to a record 3.66 trillion cubic feet.
Traders recently have shrugged off supply data, however. They’ve been swayed more by uncertainty in the U.S. dollar.
The dollar lost value to other major currencies as the federal government pumped money into stimulus programs. It took another hit this week on rumors that countries including China, Russia, Japan and France were in talks to move away from using the dollar in oil trading.
The U.S. Dollar Index, which tracks the dollar compared with other major currencies, gave up 0.81 percent in afternoon trading.
Energy commodities, which are traded in dollars, tend to rise as the dollar falls and international investors gain more buying power.
They were also boosted by a government report that weekly jobless claims fell more than expected. Alcoa Inc. also reported an unexpected profit to kick off earnings season.
At the pump, retail gas prices rose slightly overnight to a new national average of $2.468 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 11 cents cheaper than last month and 97.9 cents cheaper than a year ago.
In other Nymex trading, heating oil rose 5.73 cents to $1.8384 a gallon. Gasoline for November delivery gained 5.46 cents to $1.7749 a gallon. Natural gas for November delivery added 5 cents to $4.954 per 1,000 cubic feet.
Associated Press writers Pablo Gorondi in Budapest, Hungary, Alex Kennedy in Singapore and Bashir Adigun in Abuja, Nigeria, contributed to this report.
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