by Mark Williams
The Associated Press
Oil and gasoline prices continued to push higher Wednesday on signs that the U.S. recession may be easing and that demand for energy could rebound.
Benchmark crude for July delivery rose 61 cents to $63.06 a barrel on the New York Mercantile Exchange. Prices haven’t been that high since early November.
Retail gasoline prices, which are up 19 percent in the past month, rose 0.9 cents overnight to $2.434 a gallon (64 cents a liter), according to auto club AAA, Wright Express and Oil Price Information Service. Prices are now 10 cents a gallon higher than a week ago and 38.4 cents a gallon higher than a month ago. It’s also a high for the year.
About 74 percent of the forecasters in a survey by the National Association for Business Economics expect the recession, which started in December 2007, to end in the third quarter. Another 19 percent predict the turning point will come in the final three months of this year and the remaining 7 percent believe the recession will end in the first quarter of 2010.
Oil prices dipped below $35 a barrel as recently as March.
Many experts say that fundamentally, there is little reason for the recent price spikes and that consumers should expect related costs to come down before the summer is over.
Jim Ritterbusch of Ritterbusch and Associates said U.S. gasoline prices could be back down to nearly $2 a gallon by the end of summer.
"Demand is going to remain weak, and we’ve got plenty of excess refining capacity to crank up production," he said.
OPEC members gathered in Vienna before a meeting on Thursday. Saudi Arabian Oil Minister Ali Naimi has said the Organization of Petroleum Exporting Countries is unlikely to add to 4.2 million barrels a day of production cuts the cartel has announced since September.
"There is no need to cut production," Naimi said Wednesday, adding that the group should "stay the course." He said that oil prices would likely reach around $75 a barrel by the end of the year on the back of growing demand in Asia.
OPEC has cut down on the oil it produces to combat huge surpluses in supply. By some estimates, there are 100 million barrels of oil afloat at sea in tankers.
Many experts expect more buildups in storage warehouses will be revealed in a government report Thursday.
In other Nymex trading, gasoline for June delivery rose 3.5 cents to $1.8875 a gallon and heating oil rose about a penny to $1.555 a gallon. Natural gas for July delivery fell 2.5 cents to $3.618 per 1,000 cubic feet.
In London, Brent prices rose 91 cents to $62.15 a barrel on the ICE Futures exchange.
Associated Press writers Pablo Gorondi in Budapest, Hungary, Alex Kennedy in Singapore and George Jahn in Vienna contributed to this report.