Oil hits 2009 high above $74 a barrel

Oil rose nearly $1 towards $74 a barrel on Friday, after earlier hitting 2009 highs, as data in the United States promised economic recovery and a potential revival in energy demand. Home sales data for July showed recovery in the US housing market, while Federal Reserve Chairman Ben Bernanke said that the global economy appears to be on the mend.
US crude for October delivery was up 95 cents to $73.86 a barrel at 2:13 pm EDT (1813 GMT), after briefly touching $74.72, its highest of the year. London Brent crude for October was up 78 cents at $74.11. The dollar pared losses against the euro, helping to pressure oil off earlier highs as investors sought the safer haven of the dollar, away from commodities.
"Crude was up a lot when the dollar was down and now the dollar has backed off its lows and so crude is off its highs," said Tom Knight, a trader at Truman Arnold in Texarkana, Texas. "On balance, I see crude remaining on the upside if equities hold up their gains," he added. Bernanke told a Fed conference on Friday that the global economy was mending, though critical challenges remain and recovery is likely to be sluggish. US equities rose on Friday, sending the S&P 500 index to a 10-month intraday high on economic optimism.
Another boon for optimism came from the US National Association of Realtors, which said on Friday that sales of previously owned homes jumped 7.2 percent in July, the fastest sales pace in nearly two years. US highway travel was up 2 percent in June compared with a year ago, rising 4.9 billion miles to 256.7 billion miles, the US Transportation Department said on Friday. Tighter regulation of the energy market may take the edge off high prices, Commerzbank said in note on Thursday.
"The significant rise in the oil price in the first half of the year is due in large part to a recovery in investment by financial investors," analyst Eugen Weinberg at Commerzbank wrote in their Commodities Spotlight Energy newsletter. "If their influence is reduced by the (Commodity Futures Trading Commission's) actions and sanity prevails, the oil price will fall." The CFTC is widely expected to introduce stricter position limits for non-physical investors in commodities before the end of 2009.