Dollar loses punch and crude finds momentum
NEW YORK — Oil prices on Wednesday rose above $75 a barrel for the first time in a year because of a weak dollar and belief that the upcoming holiday shopping season will bring more traffic to the roads.
Benchmark crude for November delivery added $1.03 to settle at $75.18 on the New York Mercantile Exchange. The last time crude finished above $75 a barrel was Oct. 14, 2008, exactly one year ago.
Also helping to lift energy prices was the Dow Jones Industrials Average, which hit a new annual high and pushed past the 10,000 mark for the first time in more than a year.
Oil prices have wavered mostly between $50 and $70 a barrel since May with signs of an economic recovery emerging slowly. But a plunge in the dollar convinced many investors to pump money into crude and other commodities as a hedge against inflation.
Still, there are scant signs of definitive uptick in demand for fuel and refiners have been shutting down facilities for that reason.
“The refiners aren’t the guys buying the oil, but someone else might to protect themselves from the dollar,” analyst Stephen Schork said.
The dollar slumped to a 14-month low against the euro Wednesday after a top Federal Reserve official indicated that the U.S. would keep its interest rates low for some time.
Some analysts also expect diesel fuel demand to rise soon as U.S. truckers get in gear for the year-end holiday shopping season.
But burgeoning oil supplies this year have weighed on oil prices. Investors will be looking to the latest U.S. supply data this week from the American Petroleum Institute and the Energy Information Administration. Oil supplies are expected to grow by another 2.2 million barrels, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
At the pump, retail gas prices rose slightly overnight to a new national average of $2.481 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular gas is 9.1 cents cheaper than last month and 68.2 cents cheaper than the same time last year.
In other Nymex trading, gasoline for November delivery climbed 2.57 cents to settle at $1.8575 a gallon, and heating oil for November delivery added 1.93 cents to settle at $1.9427 a gallon. Natural gas for November delivery gave up 15.2 cents to settle at $4.436 per 1,000 cubic feet.
In London, Brent crude rose 51 cents to $72.91 on the ICE Futures exchange.
Associated Press writers George Jahn in Vienna and Alex Kennedy in Singapore contributed to this report.
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