Chris Kahn, THE ASSOCIATED PRESS

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NEW YORK - Rapidly climbing energy prices stalled this week as a steady stream of dismal financial news suggested that even if the global economy has bottomed out, it will be some time before demand for crude rebounds.

Benchmark crude for June delivery dropped US$2.28 to settle at $56.34 a barrel on the New York Mercantile Exchange. Since the start of May, oil prices have jumped by nearly $8 a barrel as it appeared the worst of the recession was over.

But a string of forecasts showing a larger drop in world oil consumption sent prices downward to end the week. The International Energy Agency, the U.S. Energy Information Administration and the Organization of Petroleum Exporting Countries all lowered crude demand expectations this week.

Retail gas prices continued to rise Friday, as they have every day this month, with refiners cutting back on production to match lessening demand. A forecast by AAA showed that more Americans are expected to travel on Memorial Day than last year, but few are predicting a healthy summer travel season.

A number of oil analysts believe that the only thing propping up energy prices this year is the re-entry into the market of hedge funds and other large investors who see crude as a hedge against inflation. Many traders on Nymex do not believe there are fundamentals in place to support prices this high.

Prices at the pump rose another penny overnight to $2.29 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. Gas is 23.9 cents a gallon more expensive than last month, but $1.486 cheaper than last year.

In Canada, the price of gas averaged 96.6 cents Canadian per litre, up from 89.6 cents a month ago, but down from $1.30 per litre a year ago, according to price-watching website GasBuddy.com.

Prices are rising just before the Memorial Day weekend and the unofficial start of summer driving season.

In other Nymex trading, gasoline for June delivery was down 4.31 cents to settle at US$1.6806 a gallon and heating oil dropped 7.59 cents to settle at $1.4188 a gallon. Natural gas for June delivery slid 19.4 cents to settle at $4.098 per 1,000 cubic feet.

In London, Brent prices lost 71 cents to settle at $55.98 a barrel on the ICE Futures exchange.

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Associated Press writers Pablo Gorondi in Budapest, Hungary, Alex Kennedy in Singapore and Edward Harris in Lagos, Nigeria, contributed to this report.