Crude-oil and natural-gas prices rose as optimism about a turnaround in the battered global economy offset pressure from robust supplies of both commodities.

 

Natural gas for June delivery on the New York Mercantile Exchange rose 19.4 cents, or 5%, to settle at $4.081 a million British thermal units, the highest settlement since March 24. Natural gas is up 13% this month.

 

Light, sweet crude for June delivery rose 37 cents, or 0.7%, to $56.71 a barrel, the highest settlement since Nov. 14. Crude is up 27% in 2009.

 

Energy commodity prices advanced amid reports that U.S. claims for state unemployment benefits dropped last week and that retailers had stronger-than-expected sales in April, helping to bolster increasing hopes of a turnaround in demand for oil and natural gas.

 

In the gas market, "we are riding the prior wave of exuberance from economic indicators pointing toward a potential bottom," said Pax Saunders, an analyst with Gelber & Associates, of Houston.

 

Natural-gas prices closed sharply higher even after the Department of Energy reported that the amount of gas in U.S. inventories rose by 95 billion cubic feet last week to 1.918 trillion cubic feet, leaving stocks 23% higher than the five-year average and 34% above the same week last year.

 

In addition to the increasing optimism about a return of industrial demand, gas-market watchers pointed to a brisk pullback U.S. drilling activity as an indicator that supply would decline. The number of rigs drilling for gas in the U.S. has fallen by more than half since September.

 

While crude settled at its highest in nearly six months, the front-month contract gave up the bulk of the day's gains as equities fell.

 

The oil market has hitched itself to equities for much of 2009, viewing stocks as an indicator of the future strength of the U.S. economy, which will in turn determine the demand for oil.

 

The oil market avoided an outright loss only because of strong buying in gasoline futures. The fuel's peak demand season is rapidly approaching, as U.S. driving typically picks up at the end of May. Refiners may be tempted to run more crude in order to ramp up gasoline production, after running at low processing rates for months.