Oil hits 2009 high, holds above $75

Crude settles above $75 a barrel for the first time this year as the dollar weakens and the outlook for energy demand brightens.

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By Ben Rooney, CNNMoney.com staff reporter

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NEW YORK (CNNMoney.com) -- Oil prices surged above $75 a barrel Wednesday for the first time this year as the U.S. dollar remained weak and investors bet that global energy demand is poised to recover.

Crude for November delivery rose $1.03, or 1.39%, and settled at $75.18 a barrel, after climbing to a high of $75.40 a barrel earlier in the session. The last time oil prices ended trading above $75 was exactly one year ago when they settled at $78.63.

Wednesday was the first time oil rose above $75 a barrel in 2009 and comes after prices traded between $65 and $75 a barrel since May.

"The markets continue to get positive indications about the economy," said John Kilduff, an energy analyst at MF Global in New York. "We've broken out of the $65-$75 range and we're clearly headed for $80 a barrel."

Wednesday's advance came as the dollar slumped to a 14-month low on speculation that U.S. interest rates will remain low for a longer-than-expected time.

The dollar index, which gauges the greenback's value against a basket of rival currencies, slid to a low of 75.45, its weakest level since August 2008.

A softer greenback makes dollar-denominated commodities such as crude oil more appealing to investors using other currencies.

Oil prices were also supported by optimism about the global economic recovery and upbeat forecasts for energy demand next year.

Stocks rallied after stronger-than-expected quarterly results from finance firm JPMorgan Chase (JPM, Fortune 500) and chipmaker Intel Corp. (INTC, Fortune 500) fueled optimism about the economic recovery.

The Dow Jones industrial average has hit 10,000 -- a level not seen since Oct. 3, 2008, when it reached 10,124 during the trading session.

Asian and European markets also rallied, with an index of global shares climbing to its highest level in a year.

On Tuesday, the Organization of the Petroleum Exporting Countries said a recovering world economy could boost crude demand by 700,000 barrels per day next year.

The improved outlook came after the U.S. Energy Information Administration and the Paris-based International Energy Agency raised their 2010 demand forecasts last week.  To top of page

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