NEW YORK (CNNMoney.com) -- Oil rose above $74 a barrel on Friday after the dollar retreated from its three-month high against the euro and amid reports that Iranian troops entered an Iraqi oilfield on Thursday.
"The weakening dollar is driving what we're seeing today more than anything," said Chris Lafakis, an associate economist at Moody's Economy.com. "And that's consistent with investors' expectations for a global economic recovery."
Crude oil for January delivery rose 71 cents to settle at $73.36 a barrel after touching $74.69 earlier. Prices dipped near $71 on Thursday as the dollar climbed to its highest point since September versus the euro.
On Friday, the dollar was flat against the euro at $1.434.
Reports that Iranian forces entered an Iraqi oilfield on Thursday also increased oil demand.
"Today's oil price movement is definitely related to the Iranian forces entering the Iraqi Fauqa oil field," said Paul Ting, president of Paul Ting Energy Vision. "Although the field itself is small, the implications are potentially big as it involves the number two and number three largest oil reserve nations within OPEC."
Lafakis expects prices to reach $84 a barrel by the end of 2010 on stronger U.S. and global economies.
Gasoline prices. The national average price for a gallon of regular unleaded gas dropped to $2.589, down two tenths of a cent from the previous day's price of $2.590, according to motorist group AAA. This is the tenth consecutive day prices have declined.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.49%||3.47%|
|15 yr fixed||2.69%||2.70%|
|30 yr refi||3.49%||3.49%|
|15 yr refi||2.72%||2.72%|
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