Energy shares up on oil rise
A decline in domestic supplies and hopes for an economic recovery pushes oil higher.
Crude oil jumped to $71.33 today, up 1.9% from Tuesday and part of that big continuing rally this year.
Crude's $70.01 close on Tuesday was its first since Nov. 4.
Oil has risen more than 57% this year, with a big jump recently, partly because speculators think that the global economy is starting to recover, which in turn, could boost demand for oil.
Oil's price is still less than half of the all-time high of $147.27 a barel reached on July 11, 2008.
Wholesale gasoline futures closed at $2.0153 a gallon, up 2.5% from Tuesday and up nearly 100% on the year.
That's why the retail price of gasoline has jumped 62% this year to $2.627 a gallon, according to AAA's Daily Fuel Gauge Report.
Gasoline inventories fell by 1.6 million barrels last week, and distillate stocks fell by 300,000 barrels, the EIA report said.
Other commodities also moved higher today on fresh evidence that China's economy is recovering, along with improved outlooks around the world.
Gold briefly rose above $960 an ounce today, as investors hedged against inflation from the surge in oil prices.
Gold finished at $954.70 an ounce, unchanged from Tuesday.
"Commodity stocks look attractive because many of them have declined below their intrinsic value and we expect the global demand for commodities to continue its long-term growth," Mark Mobius of Templeton Asset Management said.
The decline in the U.S. dollar had also contributed to oil's gains. Crude prices are denominated in dollars and generally rise when the dollar declines.
"When optimism about the global economy is out there, people feel less need to hold the dollars which they have accumulated for a rainy day," Akio Yoshino, chief economist in Tokyo at Société Générale Asset Management, told Bloomberg News.
"The dollar is likely to remain under pressure."
|Energy prices -- New York close|
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