Oil recovers early losses; gradual diesel rise expected

The Energy Information Administration’s monthly Short-Term Energy Outlook released Tuesday continued to offer a relatively stable outlook for oil and fuel prices this year. On-highway diesel fuel retail prices, which averaged $2.46 per gallon in 2009, average $2.96 per gallon in 2010 and $3.14 in 2011 in this forecast. Oil is expected to average about $80 a barrel this spring, rising to $82 by the end of the year.

By DEBORAH JIAN LEE
The Associated Press

3/9/2010

NEW YORK — Oil prices trimmed some early losses Tuesday as a two-day rally came to an end.

Benchmark crude for April delivery was down 22 cents to $81.65 per barrel in afternoon trading on the New York Mercantile Exchange. Earlier, oil dropped as low as $80.16.

Crude has risen steadily over the last two trading sessions, gaining 18 percent over the past month amid signs the U.S. economy is emerging from last year’s recession.

Tradition Energy analyst Addison Armstrong said the dollar strengthened against the euro ahead of talks between President Barack Obama and the Prime Minister of Greece, which has been reeling from financial turmoil.

Phil Flynn of PFGBest said reports that China may stop tying its currency to the dollar gave a boost to the greenback as well, “helping to bring inflated oil back down to earth.”

A stronger dollar makes crude more expensive for investors holding foreign currencies.

The Energy Information Administration’s monthly Short-Term Energy Outlook released Tuesday continued to offer a relatively stable outlook for oil and fuel prices this year. EIA sees the national average for gasoline rising above $3 per gallon this spring and summer. On-highway diesel fuel retail prices, which averaged $2.46 per gallon in 2009, average $2.96 per gallon in 2010 and $3.14 in 2011 in this forecast. Oil is expected to average about $80 a barrel this spring, rising to $82 by the end of the year.

On Wednesday EIA will report weekly petroleum inventory data. Analysts expect a sixth consecutive increase in the nation’s crude stockpiles.

Retail gasoline prices climbed again on Tuesday. The nationwide average rose 0.6 cents to $2.759 per gallon, topping the 2010 high of $2.7583 per gallon reached on Jan. 14, according to AAA, Wright Express and Oil Price Information Service.

Prices have risen 10.2 cents in the last month and are now 81.4 cents higher than levels of a year ago.

In other Nymex trading, heating oil fell 1.04 cents to $2.0951 a gallon, and gasoline dropped 2.54 cents to $2.2638 a gallon. Natural gas lost 2.5 cents at $4.502 per 1,000 cubic feet.

In London, Brent crude was down 39 cents at $80.09 on the ICE futures exchange.

Associated Press writers Pablo Gorondi in Budapest, Hungary and Alex Kennedy in Singapore contributed to this report.

Kevin Jones of The Trucker staff can be reached for comment at kevinj@thetrucker.com.

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