Oil prices pushed higher for a second straight day Wednesday on continued weakening of the U.S. dollar and as investors awaited the outcome of an OPEC meeting that is expected to result in no change in production levels.
Benchmark crude for October delivery climbed $1.15 to $72.25 a barrel on the New York Mercantile Exchange.
On Tuesday, the contract jumped $3.08 to settle at $71.10 as the dollar fell to a low for the year against the euro.
Because crude is priced in the U.S. currency, it essentially becomes cheaper when the dollar falls.
"This is all about the U.S. dollar," Jim Ritterbusch of Ritterbusch and Associates said of the rising price of oil. "As the dollar stays weak, oil goes up."
The 16-nation euro rose as high as $1.4600 in morning trading, its highest level this year. The dollar fell to its lowest level since last September against a basket of six major world currencies that includes the euro, yen, Canadian dollar, British pound, Swedish krona and Swiss franc.
Ministers of the Organization of Petroleum Exporting Countries, which produces about 40 percent of the world's oil, seemed to be satisfied with current prices for crude. Instead, this week's meeting in Vienna is more about persuading members not to sell more oil than the quotas permit.
Prices are about twice their levels from December, when OPEC announced its record 4.2 million barrel per day cut from September 2008 levels. The price rally has been welcome news for cash-hungry member governments, but also a temptation to sell more oil.
Kuwait's oil minister, Sheik Ahmed Al Abullah Al Sabah, said OPEC's markets monitoring committee would suggest to the group that output targets be held steady.
Investors also are awaiting key data on Thursday that could drive prices for the rest of the week.
The Paris-based International Energy Agency will release its monthly report on global oil demand followed by the U.S. Energy Information Administration's weekly inventory data.
Analysts expect a decline in crude and gasoline stocks, but are looking for rise in distillates stocks used to make diesel fuel and heating oil, according to Platts, the energy information arm of McGraw-Hill Cos.
Prices at the pump fell 0.5 cents overnight to a national average of $2.573, according to auto club AAA, Wright Express and Oil Price Information Service. Prices are now 7.2 cents below where they were a month ago and $1.079 below the year ago average.
In other Nymex trading, gasoline for October delivery was up 0.74 cents to $1.8363 a gallon while heating oil rose 2.63 cents to $1.8088 a gallon. Natural gas rose 13.3 cents to $2.94 per 1,000 cubic feet.
In London, Brent crude was up 91 cents to $70.33 on the ICE Futures exchange.
