Skip navigation
Oil Video Gallery
CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil is likely h...
“China is very important because it’s the fastest-growing country in the world in terms of oil demand,” Neil Atkinson fr...
“There is a danger that (asset bubbles) is the way we are going,” Derek Halpenny from Bank of Tokyo-Mitsubishi UFJ told ...
Watchlist Sponsored By :
powered by digg
Oil Hits Record above $106 on Dollar Weakness
By: Reuters | 07 Mar 2008 | 01:33 PM ET
Text Size

Oil prices eased off a new record on Friday after buying by speculators hedging against the weaker dollar and inflation sent prices above $106 a barrel.

Oil Refinery in California

U.S. light crude [US@CL.1  Loading...      ()] settled at $105.15 a barrel, trimming gains after hitting an all-time high of $106.54 earlier in the trading session. London Brent crude [GB@IB.1  Loading...      ()] traded 26 cents lower at $102.35 a barrel.

"We rose earlier on the dollar play and expectations that the Fed may have to lower rates," said Rob Kurzatkowski, a futures analyst with optionsXpress. "This has lately been an inflation and currency play."

A government report showing a second straight month of contractions in U.S. payrolls spurred talk the Federal Reserve might cut interest rates again, weakening the dollar early in the day. The greenback later rebounded, helping to ease oil off earlier highs.

The steady decline in the U.S. dollar has helped push commodity prices higher, while a sharp drop in U.S. crude stocks and OPEC's decision on Wednesday not to increase output also boosted oil prices.

While U.S. crude inventories had been building in recent weeks and U.S. gasoline stocks were at 14-year highs, a U.S. government report showed crude stocks fell by 3.1 million barrels last week, against forecasts for an increase.

The Organization of Petroleum Exporting Countries, which pumps more than a third of the world's oil, has long argued the current high prices do not reflect market fundamentals and are being driven by speculation.

Influential Saudi Oil Minister Ali al-Naimi reiterated that view in remarks published on Friday, saying speculation was behind triple-digit oil and made it impossible for any organization to control price movements.

"Today there is no link between oil (market) fundamentals and prices," he told Moroccan newspaper Asharq al-Awast. "The duty of oil exporters is to make sure that fundamentals are healthy," said Naimi. "If these fundamentals were stable and fulfill market needs, then there is no need to raise or decrease production."

OPEC will next meet in September, although ministers could confer informally at a conference between consumers and producers in Rome April 20-22.

"Leaving things so open-ended gives me and others a clear impression that the cartel is prepared to let prices run away for the time being. Perhaps they feel the weakness in the dollar would offset any rise in price," said Rob Laughlin at MF Global.

Tensions between OPEC member Venezuela, a top oil exporter to the United States, and neighbor Colombia, also have underpinned oil prices.

Copyright 2009 Reuters. Click for restrictions.
Tools:
Print EmailAdd This share icon
  • digg share

CNBC HIGHLIGHTS

  • Bernard Madoff's Baseball Jacket
  • Bernard and Ruth Madoff's personal possessions will be auctioned this weekend. Click ahead to see.
  • US real estate prices have fallen dramatically, but some places are still doing well. See the best-performing zip codes this year.
  • An Italian cashmere maker aims to make profits while creating ideal conditions for his workers.
  • Just in time for the holidays, the Triumph company of Japan offers the latest innovation in women’s undergarments.
  • The real result of health care reform will be bloated government and higher deficits, says Larry Kudlow.
  • Vote and suggest your own, and remember--there's a fine line between a hero and a zero.
ADD COMMENTS
Remaining characters


Current DateTime: 01:49:53 11 Nov 2009
LinksList Documentid: 29778428

Current DateTime: 01:05:48 11 Nov 2009
LinksList Documentid: 29779196

Current DateTime: 10:54:07 11 Nov 2009
LinksList Documentid: 29779199

Current DateTime: 01:02:04 11 Nov 2009
LinksList Documentid: 29779198
  Data is a real-time snapshot  *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
A Division of NBC Universal
Thomson ReutersThomson Reuters