Inflation worries, a weaker dollar and a report by a major investment firm helped push the price of oil up by nearly 5% on Thursday -- erasing Wednesday’s losses and pushing the commodity to new highs of 2009.

Oil & Energy Markets

On Thursday, crude oil futures for delivery in June jumped $2.56 to $68.68 a barrel after striking a session high of $69.38. The session high was a new intra-day high for the commodity.

The jump in crude comes after oil analysts at Goldman Sachs (GS) upgraded their year-end price target on the energy commodity to $85 a barrel, and raised their 2010 price target to $95 a barrel.

“The recent rally in [oil] is likely to be but the first stage in the oil price rally that we expect will accompany a recovery in economic activity [later this year],” said Goldman’s oil analysts in a note released Thursday.

Goldman analysts said the drop in crude prices earlier this year was primarily caused by the unwinding of positions from the credit crisis of late 2008 and early 2009, which caused stocks to plunge as well.

“As the financial crisis eases, an energy shortage lies ahead,” Goldman said, citing continued long-term concerns about the world’s ability to produce enough cheap oil during an economic recovery.

Oil is also being fueled by the weakening dollar. The greenback weakened significantly against several of the world’s major currencies -- most notably the euro -- on Thursday. A weak dollar makes oil, a commodity priced in dollars but primarily imported, cheaper abroad and more expensive domestically.  In midday trading, the dollar had slipped to $1.4205 to the euro.

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Inflation concerns could also seen affecting the dollar and the commodity markets, with the long-dated bonds yields rising to 3.644% in the 10-year note and 4.517% in the 30-year bond. Bond yields rise as bond prices, and therefore demand, fall.

In the other major energy markets, natural gas futures were up 4 cents to $3.806 per million British Thermal Units.

Metals

Gold, also commonly used as store of value and a hedge against inflation, closed up $16.70 a troy ounce to $991.20 - little less than $12 an ounce from its 2008 record close of $1003.20.

Silver, the less-traded precious metal, jumped 58.30 cents, or more than 3.8%, to $15.883 a troy ounce.

Industrial high-grade copper futures, used more as a sign of future economic activity as opposed to inflation concerns, were up 9 cents to $2.3015 a pound.