Oil prices surge near $71 a barrel for 4th week

NEW YORK (AP) – Oil prices are surging this month on fresh evidence the US economy is pulling itself out of recession.

A barrel of crude has jumped roughly $10 in four weeks, though some early gains were erased Friday as traders focused more on growing petroleum supplies.

Benchmark crude for September delivery gave up $1.01 to settle at $70.93 a barrel on the New York Mercantile Exchange.

Energy prices naturally rise with positive economic news. But crude has moved steadily higher even as the amount of oil placed into storage grows, appearing to defy traditional rules of supply and demand.

Crude has provided returns to investors who have pulled their investments in the US dollar, and that has led to higher energy prices all around despite dismal demand. Oil prices have doubled in price from January to June.

A surge in the US Dollar Index this week sent some of that money flowing out of energy commodities. The index measures the dollar against other major currencies.

“The guys who bought crude because of the weak dollar, those are the guys who are getting spanked right now,” said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.

The dollar rallied this week as an industry report showed pending US home sales increased in June for the fifth straight month and the government said consumers increased spending more than expected. The US Dollar Index grew 1.005, or 1.28 percent to 78.985 in afternoon trading.

The Labor Department added to the enthusiasm Friday with a report that said the country’s unemployment rate unexpectedly dipped to 9.4 percent, its first decline in 15 months.

In other Nymex trading, gasoline for September delivery fell 5.26 cents to settle at $2.0081 a gallon and heating oil dropped 2.45 cents to settle at $1.9122 a gallon. Natural gas for September delivery lost 6.9 cents to settle at $3.674 per 1,000 cubic feet.

In London, Brent prices gave up $1.24 to settle at $73.59 a barrel on the ICE Futures exchange.