A weakened dollar and evidence that OPEC has significantly slowed production sent oil prices soaring to new highs for the year Thursday. The euro was quoted at $1.3657 from $1.3509 late in New York on Wednesday. Against the Japanese currency, the dollar fell to 94.53 yen from 96.03 yen on Wednesday. “I think we'll see higher oil prices for a while,” said Michael Lynch, president of Strategic Energy and amp; Economic Research. “There's an expectation that the market has bottomed out.” Benchmark crude for April delivery surged $3.47, or 7 percent, to settle at $51.61 a barrel on the New York Mercantile Exchange. Oil prices hit $52.25 earlier in the day, a price last seen on Dec. 1. In London, Brent prices rose $3.01 to settle at $50.67 on the ICE Futures exchange. Crude prices have increased 11.6 percent since OPEC ministers met in Vienna on Sunday. The group said it would not cut production again immediately, but there is growing consensus that the millions of barrels taken off the market already each day are starting to balance a supply and demand picture that has been skewed for months. With the April contract set to expire Friday, most of the trading had shifted to the contract for May delivery, where prices jumped $3.14 to settle at $52.04 a barrel. Analysts rushed to buy crude after the Federal Reserve announced late Wednesday it would buy long-term government bonds, a measure that's expected to jolt the US economy with lower rates on mortgages and other consumer debt. The Fed also said a $1 trillion program to jump-start consumer and small business lending could be expanded to include other financial assets. The announcements sent the dollar into a tailspin. The US dollar dropped against other major currencies almost immediately, at one point falling to levels not seen since January. The dollar has fallen about 5 percent against the euro over the past couple days.Because oil is bought and sold in dollars, a weak US currency makes crude cheaper globally. The Organization of Petroleum Exporting Countries appears to be pushing through the production cuts it promised to make last year, according to tanker tracker Oil Movements. Member states agreed last year to squeeze global oil supplies, trimming 4.2 million barrels per day. Crude exports from OPEC countries have been shrinking during the past few months. They're expected to drop 770,000 barrels a day in the four weeks leading to April 4, according to an Oil Movements report. Meanwhile, prices of commodities from gold to corn surged on Thursday as the Federal Reserve's decision to pump more than $1 trillion into the US economy stoked fears of inflation. Gold prices soared 8 percent to their highest close in nearly a month, while oil jumped above $51 a barrel.
