Oil prices neared new highs for the year Tuesday as the U.S. dollar slipped against other major currencies, demonstrating how much the weakened U.S. currency can affect consumers globally.
The U.S. dollar index, where the U.S. currency is measured against other major currencies, hit a 14-month low Tuesday. Because crude is bought and sold in dollars, it essentially becomes cheaper for international investors who have flooded into energy markets despite a big surplus of oil.
Energy experts expect the U.S. government will report Thursday that crude supplies are still growing. That does not appear to be a deterrent for many investors because the dollar is so weak.
Benchmark crude for November delivery gained 88 cents to settle at US$74.15 on the New York Mercantile Exchange. At one point, prices reached $74.47, just short of the $75 reached on Aug. 25, when the driving season was still in full swing.
Prices have now risen for four straight days and a barrel costs four per cent more than it did one week ago.
Natural gas, which is not sold only in U.S. dollars, tumbled 29.2 cents, nearly six per cent, to $4.588 per 1,000 cubic feet on Nymex.
Retail gasoline prices in the United States remain comfortably low.
In Canada, the price of gasoline averaged 95.9 cents per litre, down from $1.009 a month ago and $1.138 at this time last year, according to GasBuddy.com.