Oil settles at $63.45

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NEW YORK (CNNMoney.com) -- Oil flirted with $64 a barrel on Wednesday after the Saudi oil minister said the global economy can handle oil prices between $75 and $80.

Light sweet crude for July delivery rose $1, or 1.6 %, to settle at $63.45 a barrel Wednesday, after reaching as high as $63.82 earlier in the session.

That's the highest settle price since Nov. 5, and the fifth day in a row that oil has settled above $60.

Wednesday, the Saudi Oil Minister, Ali al-Naimi, said that the global economy was capable of managing with oil as high as $75 to $80 a barrel, according to reports from Reuters.

Oil has been very volatile in the past year. Oil prices topped out at $147 a barrel last summer before plunging below $34 a barrel in December. Then oil doubled back to pop up over $60 a barrel since the start of the year.

"The price rise is a function of optimism that better things are coming in the future," Naimi told reporters in Vienna, according to reports from Reuters. "We see offshoots of recovery." Comments from the head of oil juggernaut Saudi Arabia tend to drive the price of crude.

Al-Naimi hinted at higher prices in the future, but for now, the Organization of Petroleum Exporting Countries was expected to leave production quotas unchanged. The cartel - whose members produce about 40% of the world's crude - meet Thursday in Vienna to discuss production levels. When they cut production levels, that props up oil prices by reducing supply.

Starting late last year, OPEC announced reductions of 4.2 million barrels a day, and member nations have largely been complying with the production cut backs.

But with oil prices already on the rise and a tender global economy looking to stage a recovery, OPEC would be hard pressed to rationalize further production cuts.

The recession has cut demand for oil drastically, as cash-strapped consumers and businesses reduce their energy consumption. Therefore, inventory levels in the U.S. have been mounting, and the government's weekly supply reports have been closely monitored.

Typically, the Energy Information Administration's weekly supply report is posted Wednesday morning, but due to the Memorial Day holiday, the report comes out on Thursday.

Analysts expect weekly oil inventory data to be mixed in the most recent week. Crude oil stocks are forecast to build by 1.8 million barrels, as gasoline stockpiles draw down by 1.7 million barrels at the start of the summer driving season, according to a consensus estimate of industry analysts surveyed by Platts, a global energy information provider. Stockpiles of distillates, which are used to make heating oil and diesel fuel, are forecast to build by 750,000 barrels.

In the longer term, the EIA says that it expects demand to recover and continue to grow. In its most recent International Outlook, released Wednesday, the EIA projected that global energy consumption should shoot up by 44% from 2006 to 2030.

Gas prices: As crude prices have crept up, so have gas prices. The pain at the pump has been getting steadily more severe for the last month. Retail gas prices have climbed for 29 consecutive days.

The national average price for a gallon of regular unleaded gasoline increased to $2.434, up 9 tenths of a cent from the previous day's price of $2.425 according to a daily survey by motorist group AAA.

In the last 29 days the average price of gas has jumped 38.6 cents or 18.8%. The average price of a gallon of gas is down $1.68 or 40.8% from the record high price of $4.114 that AAA reported on July 17, 2008.