Tulsa World: Oil prices top $80 amid worries on dollar, storm

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Oil prices top $80 amid worries on dollar, storm
But gasoline prices continue a downward trend nationally.

By FROM STAFF AND WIRE REPORTS
Published: 11/10/2009 2:23 AM
Last Modified: 11/10/2009 8:32 AM

Oil prices shot up $2 a barrel Monday as a weakened U.S. dollar created more turbulence in energy markets than a storm heading into the Gulf of Mexico.

The price of regular unleaded gasoline in Tulsa, meanwhile, slipped to $2.31 a gallon at many convenience stores.

Pump prices began the past weekend at $2.39, but some retailers pulled back to $2.35 on Sunday.

A month ago, the local average was $2.23, according to travel club AAA-Oklahoma.

A year ago, gasoline was selling for $1.87, a level reached after several months of steep declines following fuel hitting a record high of $3.93 locally in mid-summer.

Gasoline prices also continued to move downward nationwide. The Energy Information Administration in its weekly update released Monday afternoon put the national average price for a gallon of unleaded regular at $2.666, down 2.8 cents from the previous week and the first decline after five straight weekly increases. The biggest drop was in the Midwest, where pump prices fell almost 6 cents.

On Monday, Ida helped push crude prices above $80 a barrel in early trading.

Normally, the storm's demotion from hurricane to a tropical storm would depress crude prices.

But the dollar is the real driver of energy markets at the moment. So, when the euro pushed past the $1.50 level for the first time this month, oil prices rose even further.

Investors holding euros or other strong currencies can buy more dollar-based crude when the U.S. currency falls, and that has sent prices higher throughout the year.

Demand for oil is still weak, but investment in crude futures has paid off this year. A barrel of oil cost $32 in December.

Benchmark crude for December delivery on Monday rose $2 to settle at $79.43 a barrel on the New York Mercantile Exchange.

A barrel passed $80 by early afternoon before easing back.

The U.S. National Hurricane Center said Ida was expected to weaken further before making landfall along the Gulf Coast.

Weather Insight LP is expecting 700,000 barrels per day of crude oil production to be shut in, and 3 billion cubic feet per day of natural gas production to be taken off line until about Wednesday.

In other Nymex trading, heating oil rose 5.9 cents to settle at $2.0627 a gallon. Gasoline for December delivery gained 5.75 cents to settle at $1.9818 a gallon.

Natural gas for December delivery rose 7.5 cents to $4.67 per 1,000 cubic feet.

The Tulsa World Business staff contributed to this report by The Associated Press By FROM STAFF AND WIRE REPORTS

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Some reader comments for this story were copied from "Gasoline prices fall in Tulsa despite rise in oil," which was published on 11/9/2009.

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