HOUSTON — Oil prices rose 10 percent Thursday as the value of the dollar sank further and investors dumped money into crude markets.
The falling dollar, which makes commodities like oil more attractive, outweighed a report from the International Energy Agency, which said energy demand is sliding sharply.
Crude prices have spiked ahead of next week’s meeting of OPEC, which is expected to slash production.
“Probably the biggest factor right now is financials,” said Phil Flynn, an analyst with Alaron Trading Corp. “The market is worried that all these bailouts . . . means we’re going to be printing a lot more money, which makes the dollar weaker. That’s really supporting the price.”
Paris-based IEA said Thursday that global oil demand will shrink this year for the first time since 1983. The IEA cut its forecast for global oil demand in 2008 by 350,000 barrels a day to 85.8 million barrels a day, down 0.2 percent from 2007.
Light, sweet crude for January delivery rose $4.46 to settle at $47.98 a barrel in trading on the New York Mercantile Exchange, after rising to near $49 earlier in the session.
Prices at the pump, however, continue to plummet. Gasoline prices fell 1.9 cents overnight to a national average of $1.664 per gallon, according to auto club AAA, the Oil Price Information Service and Wright Express. In Denver, a gallon averaged $1.546 Thursday, down 1.9 cents from Wednesday.
