Libya, OPEC Remarks Spark Crude Oil Rally

Crude oil was sharply higher in an abnormally volatile session at the New York Mercantile Exchange, fueled by a weaker U.S. dollar and longside-friendly statements coming from Libya and OPEC.

Texas light sweet crude for August delivery was last seen trading $3.16 higher at $137.71 a barrel, and Brent crude was gaining $3.12 at $137.45 a barrel.

Reformulated gasoline was 8 cents ahead at $3.47 a gallon, heating oil was adding 11 cents at $3.86 a gallon and natural gas was sliding 6 cents to $12.70 per million British thermal units.

The greenback was weaker Thursday, losing nearly a cent against the euro. The U.S. Dollar Index, which measures the value of the dollar against a basket of world currencies, was down 0.5% at 72.55.

Also affecting crude markets was a comment made by the head of Libya's national oil company, saying the nation may reduce production rates because the market could have an oversupply. Adding to the upward pressure was a prediction made by the president of OPEC that oil could trade toward $170 a barrel this year.

Meanwhile, energy stocks were mixed. ConocoPhillips (COP Quote) was down 0.4% at $93.64, Chevron(CVX Quote) was 0.4% lower at $98.97 and Exxon Mobil (XOM Quote) was flat at $87.59.

The U.S. Oil(USO Quote) ETF, which closely tracks the value of WTI contracts on the Nymex, was gaining 3.1% at $111.82.