Oil settles above $71 on weaker dollar
NEW YORK — Energy prices climbed Thursday despite massive petroleum surpluses, as the dollar weakened and equities markets rose.
Benchmark crude for November delivery added $2.12 to settle at $71.69 a barrel on the New York Mercantile Exchange. In London, Brent crude gained $2.57 to settle at $69.77 on the ICE Futures exchange.
Natural gas, gas futures and heating oil also jumped.
“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 set a new record for unused supplies earlier this month. On Thursday, the EIA said stockpiles continued to grow in underground caverns, climbing last week to 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 and signs that the economy was on the mend.
The dollar has lost value to other major currencies as the federal government pumped money into stimulus programs. It took another hit this week on rumors that some 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 0.59 percent in afternoon trading.
Energy commodities, traded in dollars, tend to rise as the dollar falls and international investors gain more buying power.
They were also boosted by positive readings on the economy. The International Council of Shopping Centers-Goldman Sachs tally showed that retailers last month enjoyed their first sales gains in more than a year.
In addition, the government reported that weekly jobless claims fell more than expected, and Alcoa Inc. 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 6.58 cents to settle at $1.8469 a gallon. Gasoline for November delivery gained 5.94 cents to settle at $1.7797 a gallon. Natural gas for November delivery added 5.9 cents to settle at $4.963 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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