Oil prices neared new highs for the year Tuesday as the 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 government will report Wednesday that crude supplies are still growing, but that does not appear to be a deterrent for many investors because the dollar is so weak.
Benchmark crude for November delivery gained 54 cents to $73.81 on the New York Mercantile Exchange. At one point, prices reached $74.47, just short of the yearly high of $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 cost 4 percent more than it did one week ago.
Natural gas, which is not sold only in dollars, tumbled 32.4 cents, or 8.8 percent, to $4.556 per 1,000 cubic feet on Nymex.
Crude has traded between $65 and $75 for months as traders look for signs of an economic recovery.
On Tuesday, OPEC said China and other developing countries would push global oil demand up slightly next year, but said any recovery would be "slow and weak."
The Organization of the Petroleum Exporting Countries supplies over 35 percent of the world's crude.
"Given the recent improvement in the economic performance of OECD and China, oil demand is expected to be better than earlier forecast," OPEC said, referring to the Organization for Economic Cooperation and Development, a rich nations club.
Meanwhile, the average price for a gallon of regular gasoline fell four-tenths of a cent to $2.478, according to auto club AAA, Wright Express and Oil Price Information Service. That's 1.7 cents more than a month ago, but nearly 73 cents less than gas cost at this time last year.
In other Nymex trading, heating oil rose 2.7 cents to $1.9215 a gallon, and gasoline for November delivery gained 2.7 cents to $1.826 a gallon.
In London, Brent crude rose 18 cents to $71.54 on the ICE Futures exchange.
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