Oil prices continues climb

By Annalyn Censky, staff reporter

NEW YORK (CNNMoney.com) -- After surging 4% the day before, oil prices climbed again Thursday after Chinese officials denied reports that they're reconsidering the country's holdings in European bonds.

What prices are doing: Crude for July delivery rose $3.04, or about 4.25%, to settle at $74.55 a barrel Thursday.

Click the chart for the current price of oil and other commodities.

Gasoline prices fell for the 20th consecutive day, slipping to $2.759 a gallon from $2.771 the day before, according to a survey by motorist group AAA.

What's moving the market: Oil traders welcomed news from China's State Administration of Foreign Exchange, which rejected reports that the country is reviewing its investment in European bonds.

Those comments boosted oil prices by calming investors' fears about economic instability in Europe. Since the beginning of the month, oil has plummeted from $86.19 based on fears that the region's debt crisis will curb demand for fuel and concerns about U.S. supply outpacing demand.

The dollar also slipped against the euro and British pound Thursday, making oil -- which is priced in the U.S. currency -- a cheaper buy for foreign investors.

Oil traders are looking ahead to the Memorial Day weekend as an unofficial start to the peak driving season, and expect to see gasoline demand pick up in the summer.

A report out from the Energy Information Administration Wednesday showed gasoline supplies decreased by 200,000 barrels last week and distillate fuel, a category that includes heating oil and diesel, decreased by 300,000 barrels.

While crude oil inventories increased by a much higher than expected 2.4 million barrels, the supply held in Cushing, Okla. -- a key storage hub and delivery point for NYMEX crude oil futures -- fell by 300,000 barrels. To top of page

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