Oil prices finish the week trading up, stocks dip lower

Oil prices finished the week trading up above $78 per barrel for the first time in a year, marking the largest weekly percentage increase in the cost of crude oil since 2008. Benchmark crude added 95 cents to settle at $78.53 a barrel on the NYMEX. In London, Brent crude oil futures for December delivery climbed to settle at $77.15 on the ICE Futures exchange.

“I think this rally is based more on hope than reality,” said Michael Lynch, president of Strategic Energy & Economic Research. “There’s so much oil out there that people are going to start using it for their pancakes.”

All one needs to do is look at oil refiners to see where the industry stands. Refiners are shutting down facilities and production has thinned to levels that are usually seen only after a hurricane tears up the Gulf Coast energy complex.

The rise in energy prices is all about the dollar, which hit a 14-month low on Thursday. Crude is bought and sold in the dollar, so it gets cheap for investors when the US currency falls. Oil prices jumped more than 9 percent during the past week as the dollar floundered. The last time crude futures rose so fast was the week of Aug. 24, when tourists crammed the highways during what’s typically the busiest travel period of the year.

Tags:  oil prices, stocks, trading