Oil settles higher, gas pump prices still sliding

Posted May 18, 2011, at 6:13 p.m.

NEW YORK — Investors seized on the weaker dollar Wednesday to buy a wide range of commodities, including oil, which reversed two days of losses to settle above $100 per barrel for the first time in a week.

Benchmark West Texas Intermediate crude for June delivery rose $3.19, or 3.3 percent, to settle at $100.10 per barrel on the New York Mercantile Exchange.

Oil is still down about 12 percent since hitting a two-year high of $113.93 a barrel on April 29. The dollar has risen 3.5 percent since the beginning of May. Oil is priced in dollars and tends to fall as the dollar rises and makes it less attractive to investors holding other currencies.

“They’re just moving in close tandem right now,” said oil analyst Jim Ritterbusch. “It’s been like this for the past few days.”

On Wednesday, the dollar lost ground to foreign currencies. That propped up crude and other dollar-based commodities; including metals such as gold, silver and copper, along with grains, cotton and sugar.

Oil got an additional boost after the Energy Information Administration reported that the nation’s oil supplies were unchanged last week.

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