Oil prices rise to 7-month high
Tuesday, 2 June 2009
NEW YORK, June 1 (CNNMoney.com): Oil prices touched 7-month highs Monday as global stock markets surged and the U.S. dollar weakened.
Crude futures were up $1.46 at $67.77 a barrel but had reached as high as $68.29 in electronic trade earlier. The last time oil prices reached such levels was Nov. 5, when oil traded just as high as $70.46 a barrel during the session.
Stock markets around the world rallied and U.S. stock futures, which offer an indication of how markets may open when trading begins, were also pointing to a higher start.
The Hong Kong Hang Seng index climbed almost 4% and European markets posted gains between 1% and 3%.
Investors use stock markets as a bellwether for the economy, and a stronger economy demands more energy. In recent months, oil prices have largely tracked stock markets because investors bet that as the economy goes, so goes demand for oil.
As stocks surged, Treasury prices fell and the dollar weakened. Government debt and the greenback are both perceived as investor safe havens, but as recovery hopes gain strength, investors move funds into higher yielding assets.
The weakening dollar boosted oil prices. Crude is traded in the U.S. currency around the globe, and so a weaker dollar pushes the prices of oil up in relation to other currencies. The euro was up 0.4% against the dollar, the British pound gained 1.2%, and the dollar fell 0.6% against the Japanese yen.
The global rally in stocks came as General Motors, one of three major U.S. automakers and long a symbol of domestic manufacturing power, filed for bankruptcy protection.
Crude prices have doubled since the end of 2008, and as oil prices have surged, so have gas prices. For consumers, the silver lining to the recession was cheap gas. But for the past 34 consecutive days, the pain at the pump has increased.
The national average price for a gallon of regular unleaded gasoline increased to $2.512, up 1 cent from the previous day's price of $2.502, according to according to motorist group AAA.
In the last 34 days the average price of gas has increased 46.4 cents, or 22.6%. The average price of a gallon of gas is down $1.60, or 38.9%, from the record high price of $4.114 that AAA reported on July 17, 2008.
Crude futures were up $1.46 at $67.77 a barrel but had reached as high as $68.29 in electronic trade earlier. The last time oil prices reached such levels was Nov. 5, when oil traded just as high as $70.46 a barrel during the session.
Stock markets around the world rallied and U.S. stock futures, which offer an indication of how markets may open when trading begins, were also pointing to a higher start.
The Hong Kong Hang Seng index climbed almost 4% and European markets posted gains between 1% and 3%.
Investors use stock markets as a bellwether for the economy, and a stronger economy demands more energy. In recent months, oil prices have largely tracked stock markets because investors bet that as the economy goes, so goes demand for oil.
As stocks surged, Treasury prices fell and the dollar weakened. Government debt and the greenback are both perceived as investor safe havens, but as recovery hopes gain strength, investors move funds into higher yielding assets.
The weakening dollar boosted oil prices. Crude is traded in the U.S. currency around the globe, and so a weaker dollar pushes the prices of oil up in relation to other currencies. The euro was up 0.4% against the dollar, the British pound gained 1.2%, and the dollar fell 0.6% against the Japanese yen.
The global rally in stocks came as General Motors, one of three major U.S. automakers and long a symbol of domestic manufacturing power, filed for bankruptcy protection.
Crude prices have doubled since the end of 2008, and as oil prices have surged, so have gas prices. For consumers, the silver lining to the recession was cheap gas. But for the past 34 consecutive days, the pain at the pump has increased.
The national average price for a gallon of regular unleaded gasoline increased to $2.512, up 1 cent from the previous day's price of $2.502, according to according to motorist group AAA.
In the last 34 days the average price of gas has increased 46.4 cents, or 22.6%. The average price of a gallon of gas is down $1.60, or 38.9%, from the record high price of $4.114 that AAA reported on July 17, 2008.