- The Washington Times - Tuesday, August 25, 2009

HOUSTON | Oil prices approached $75 a barrel Monday for the first time in 10 months amid growing optimism that the world’s economies are on the mend.

Benchmark crude for October delivery rose 48 cents to settle at $74.37 a barrel on the New York Mercantile Exchange. Oil last topped $75 in October, and on Monday prices came within 19 cents of that mark.

Natural gas rebounded strongly from new seven-year lows Monday, yet still traded below $3 per 1,000 cubic feet because of a huge glut and very little demand from major industrial customers.

Expectations that demand for energy will grow, at least for oil and gasoline, were spurred Friday by Federal Reserve Chairman Ben S. Bernanke, who said the U.S. economy is reviving. Mr. Bernanke’s remarks and signs of improvement in the U.S. housing market sent stock markets higher, and that carried over into the new week.

Even before Mr. Bernanke spoke, however, prices already had begun to rise on a large and unexpected drawdown in U.S. oil supplies. One factor that might be keeping crude below $75 is the possibility that last week’s storage report was an aberration, given that demand for now remains weak.

Equity and energy markets have been rising and falling in tandem for weeks and at the start of this week, it was more of the same.

Asian and European markets climbed Monday, and the Dow Jones industrial average rose moderately.

It’s been slightly more than a year since a barrel of crude soared close to $150 a barrel. No one expects another run to those heights anytime soon, but even the prospect of increasing demand is sure to keep upward pressure on prices.

In a report Monday, trader and analyst Stephen Schork said once oil gets to $75, there is not “a lot to prevent it from going to $80 or $85.”

Natural gas is another story. Prices are at seven-year lows and supplies continue to grow. Friday marked the 11th session out of 12 trading days in which gas prices fell.

It has been a very moderate summer and meteorologists are forecasting the same through the fall. That could drive natural gas prices down even further if people don’t need as much heat for their homes.

Gasoline prices have flattened and few expect a major run on prices as the driving season winds down.

Retail gas prices were almost unchanged overnight, falling to a new national average of $2.626 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular is 14.5 cents more expensive than it was a month ago, but it’s $1.062 cheaper than last year.

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