Oil prices climbed today as the combination of a weaker dollar and stronger stock market outweighed concerns about weak demand and vast supplies of crude, according to AP. Benchmark crude for November delivery rose 61 cents to $71.02 on the New York Mercantile Exchange. Meanwhile, the government said in its annual winter outlook Tuesday that lower fuel costs and an expected milder winter for much of the nation will cut average winter heating costs by 8 percent from last year to about $960 this winter. The dollar fell on Tuesday toward year lows against the euro and yen after Britain's Independent newspaper reported that Arab states, China, Russia, Japan and France were meeting secretly to end the dollar's role in pricing oil. Several countries denied such talks had taken place. Because crude is priced in dollars it becomes cheaper when the dollar falls. Some investors also use commodities such as oil and gold as a hedge against inflation and dollar weakness. Gold hit a record $1,037 an ounce Tuesday. Oil also pushed higher as U.S. stock markets climbed more than 1 percent for a second day, driving hope that the economy is recovering and that demand for crude will grow. Still, investors say demand remains weak because of the recession and supplies remain abundant.
