Oil jumps above $52 as stock market surges

NEW YORK -- Oil prices surged nearly 9% Thursday as investors focused on a weaker dollar, rising stock markets and the hope that the U.S. economy has finally bottomed out.

Natural gas prices also rose even though a government report said U.S. inventories remain well above historical levels.

Price changes in both commodities directly affect the American economy. A jump in crude prices can influence everything from how much it costs to fill up at the gas pump to the cost of making golf balls, shampoo and thousands of other petroleum-based products.

Natural gas is used around the country to make electricity, so its price affects how much power companies want to charge rate payers.

On Thursday, benchmark crude for May delivery rose $4.25 to settle at $52.64 a barrel on the New York Mercantile Exchange. In London, Brent prices gained $4.31 to settle at $52.75 a barrel on the ICE Futures exchange.

Natural gas for May delivery added 8.7 cents to settle at $3.782 per 1,000 cubic feet.

"We're getting a bounce today, but I'm not sure if it will go much higher," said Peter Beutel, oil analyst at Cameron Hanover. "The market has a lot of reasonably negative factors going into it."

A massive surplus of crude has kept prices low this year, and government reports said that U.S. storage houses are only getting more bloated. They're now brimming with more oil than they've had in 16 years as manufacturers shutter factories and millions of laid off workers stay home.

On Thursday, the Labor Department said unemployment levels are the highest in more than 26 years. Initial claims for unemployment insurance unexpectedly rose to a seasonally adjusted 669,000 from the previous week's revised figure of 657,000.

The Energy Department's Energy Information Administration also reported Thursday that natural gas inventories held in underground storage in the lower 48 states stayed at 1.65 trillion cubic feet for the week ended March 27.

That's 32.1% above the inventory level from a year ago and 22.4% above the five-year average, according to the government data.