Oil off highs after push above $60

Signs of economic stabilization and a weak dollar boost early trading, but crude pares gains on demand concerns.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Ben Rooney, CNNMoney.com staff writer

Click the chart for current oil prices.

NEW YORK (CNNMoney.com) -- Oil prices held their gains Tuesday, after climbing to a six-month high, as investors weighed signs of economic stabilization against weak energy demand and record-high crude inventories.

Light, sweet crude for June delivery rose 35 cents to settle at $58.85 a barrel after climbing to $60.08 a barrel in pre-market, electronic trading.

It was the first time oil traded above $60 a barrel since Nov. 11 when it hit an intra-day high of $60.80. Oil last settled above $60 on Nov. 10, when it ended at $62.41.

The advance came as the dollar fell sharply against rival currencies. The price of oil often rises when the greenback falls because crude is priced in dollars around the world.

But the rally faded as investors remain concerned about the poor fundamental backdrop for the oil market, which has driven the price of crude down from last summer's all-time high of $147 a barrel.

In its monthly short-term energy outlook, the Energy Information Administration lowered its outlook for 2009 world oil consumption by 1.8 million barrels per day to 83.67 million. That's 400,000 more than last month's projection.

"World oil consumption remains weak because of the global economic downturn," the report said.

As demand has withered, U.S. crude supplies have risen to their highest levels since 1990 and analysts expect another 1.4 million barrel expansion when the EIA releases its weekly inventory report Wednesday.

The market was supported Tuesday by a report that showed Chinese investment spending surged in April, including a big advance in spending on transport. But the report also showed a larger-than-expected drop in exports, which does not bode well for China's export-driven economy.

Meanwhile, stocks were lower in choppy trading on the New York Stock Exchange. Asian markets fell and European shares were mixed in active trading.

Many oil traders view the stock market as a leading economic indicator and a barometer of future oil demand. As a result, the price of oil often rises and falls with the major stock indexes.

Gas: Retail gas prices rose for the 14th day in a row, according to a survey by motorist group AAA.

The national average price for a gallon of regular gasoline rose 2.2 cents overnight to $2.248. Over the past 14 days, gas prices have increased 20 cents.

Separately, AAA said it expects Memorial Day travel to rebound after a sharp drop last year. The motorist group also said it expects gas prices to stay below an average $2.50 a gallon this summer.

In its report, the EIA said it expects gasoline to average $2.21 per gallon this summer.  To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
These 10 food trends could dominate 2015 So long, kale. Here's what's expected to shake up the food industry next year. More
Beyond Russia: Geopolitical hot spots in 2015 Investors beware: These 5 global crises are likely to rattle the stock market and world economy. More
20 antique guns that fetched big bucks Morphy Auctions in Pennsylvania put nearly 1,000 old guns on the block. Here are just a few. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.