Oil and gas prices hit new high for the year

COLUMBUS, Ohio -- Oil and gasoline prices hit a new high for the year Wednesday despite expectations that OPEC will not cut production again and more bad news arrived for the nation's automakers.

Benchmark crude for July delivery rose $1 to settle at $63.45 a barrel on the New York Mercantile Exchange. Prices haven't been that high since early November.

Retail gasoline prices, which are up 19% in the past month, rose 0.9 cents overnight to $2.434 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. Prices are now 10 cents higher than a week ago and 38.4 cents a gallon higher than a month ago. It's also a high for the year.

There were signs of optimism about the economy, which could lead to a rebound in demand for energy.

About 74% of the forecasters in a survey by the National Association for Business Economics expect the recession, which started in December 2007, to end in the third quarter. Another 19% predict the turning point will come in the final three months of this year and the remaining 7% believe the recession will end in the first quarter of 2010.

Oil prices dipped below $35 a barrel as recently as March.

Many experts say that fundamentally, there is little reason for the recent price spikes and that consumers should expect related costs to come down before the summer is over.

Major U.S. industries continue to struggle and on Wednesday, a bankruptcy filing by General Motors appeared inevitable.

Jim Ritterbusch of Ritterbusch and Associates said gasoline prices could be back down to nearly $2 a gallon by the end of summer.

"Demand is going to remain weak, and we've got plenty of excess refining capacity to crank up production," he said.

OPEC members gathered in Vienna before a meeting on Thursday. Saudi Arabian Oil Minister Ali Naimi has said the Organization of Petroleum Exporting Countries is unlikely to add to 4.2 million barrels a day of production cuts the group has announced since September.

He said that oil prices would likely reach around $75 a barrel by the end of the year on the back of growing demand in Asia.