Oil prices hit 10-month high of $74

NEW YORK (AP) – Oil prices jumped Friday to a new high for the year after Federal Reserve Chairman Ben Bernanke said that the US economy is nearing a recovery and other economic data backed him up.

Benchmark crude for October delivery rose 98 cents to settle at $73.89. After Bernanke spoke at an annual Fed conference in Jackson Hole, Wyoming, prices briefly neared $75.

The price for natural gas plummeted to a new seven-year low, which suggests some skepticism about an economic rebound. Natural gas is used by major industries, including utilities, for power.

Energy experts had a hard time explaining how natural gas can plunge while prices for other energy futures, including heating oil and gasoline, continue to rise.

“If there’s a recovery, people would be using electricity first before they buy gasoline,” said Peter Beutel at Cameron Hanover. “Yet oil prices are going up and natural gas prices are down.”

Oil started climbing early in the morning after financial information company Markit said its composite purchasing managers’ index showed the European economy was stabilizing.

“If Europe’s coming out of recession, the euro could get even stronger,” analyst Phil Flynn said. “That means more demand for oil.”

And the dollar did fall against the euro to end the week, effectively making dollar-based oil cheaper across the globe. That created its own momentum and drew a lot of investor money into crude, meaning the price for gasoline and other fuels will likely move up as well.