Oil prices hit new highs for the year today just as the dollar fell to new lows against the euro, showing how much the weak U.S. currency has come to dominate energy markets.
Benchmark crude for December delivery jumped more than 3 percent, or $2.71 to $81.83 a barrel on the New York Mercantile Exchange. It got as high as $80.70.
Gasoline futures spiked 4 percent and Brent crude rose $2.48 to $79.72 on the ICE Futures exchange.
The run-up in prices came within minutes of a government report showing that crude supplies in the United States are growing and that refiners are producing very little gasoline because consumers aren’t using as much.
“The dollar obviously is the overriding factor,” PFGBest analyst Phil Flynn said. “It’s not about demand I can tell you that.”
Refiners are shutting down plants, a combination of little demand and rising crude prices that wipe out profit margins.
That can have real consequences at the pump. The government reported Wednesday that gasoline supplies fell by more than 2 million barrels last week.
There is usually a lag between the direction of crude bought and sold on Nymex and the price that people pay for gasoline to fill up their cars.
Crude began to rise on Oct. 7, when a barrel cost less than $70. Prices moved higher for eight days in a row, nearly reaching $80.
In other Nymex trading, heating oil rose 7.6 cents to $2.12 a gallon. Gasoline for November delivery rose 7.6 cents to $2.07 a gallon. Natural gas for November delivery rose 13 cents to $5.29 per 1,000 cubic feet. (AP)
