Oil climbs to near $68, new high for the year

COLUMBUS, Ohio -- Oil prices pushed to new highs for the year Monday on a weak dollar and new data suggesting manufacturing in China has strengthened. Both of those factors helped send energy prices to record highs last summer.

Benchmark crude for July delivery rose $1.34 to $67.65 a barrel on the New York Mercantile Exchange, the highest level since early November. It had traded above $68 earlier in the day.

The data out of China shows how much economic news from across the globe can effect pocketbooks in the U.S.

Brokerage CLSA Asia-Pacific Markets said its purchasing managers index rose to 51.2 from April's 50.1 on a 100-point scale, indicating that the world's third-largest economy might be recovering from a slump. Numbers above 50 show an expansion. The state-sanctioned China Federation of Logistics and Purchasing reported that its index had eased, but that manufacturing was still expanding somewhat.

When crude prices were heading toward $150 per barrel last year, many energy analysts believed the booming economies of China and India would support energy prices globally.

That did not turn out to be the case and there is little tangible evidence to suggest that the rapid rise in energy prices can be sustained for long this summer.

That would be good news for consumers, who still need a lot less money than they did last year to pay utility bills or buy gasoline.

But right now, there is evidence that more speculative money is flooding into the market, buoying prices.

The net number of large speculative positions taken on stronger oil prices rose more than 14 percent last week, according to a report from the Commodity Futures Trading Commission.

A lot of that money is being driven by inflation fears as the dollar falls against other major currencies.

Even though another report showed that U.S. manufacturing continues to contract, the Tempe, Arizona-based Institute for Supply Management reported the first month of growth in the new-orders index since November 2007.

Natural gas prices have slumped to five-year lows with some of the biggest users, like manufacturers, hammered by the recession. On Monday, natural gas futures jumped more than 5 percent.

The lack of broader, fundamental support hasn't stopped momentum from building in energy markets.

"I don't believe in it ... but I'm not dumb enough to stand in front of it," oil trader and analyst Stephen Schork said of the rally.

In other Nymex trading, gasoline for June delivery rose 1.4 cents to $1.91 a gallon and heating oil gained 5.8 cents to $1.7364 a gallon. Natural gas for June delivery jumped 19.6 cents to $4.03 per 1,000 cubic feet.

In London, Brent prices rose $1.36 to $66.88 a barrel on the ICE Futures exchange.