Skip navigation
Oil Video Gallery
Black Friday is right around the corner and many holiday wish lists include one or two big ticket electronic items. Sony...
Discussing the prospects for natural gas and the growth potential offered by mining natural gas shale, with Steven Muell...
CNBC's Brian Shactman discusses the direction of gold, from the NY Mercantile Exchange.
Watchlist Sponsored By :
powered by digg
Oil Closes at Record High on US Dollar Worries
By: Reuters | 10 Mar 2008 | 03:02 PM ET
Text Size

Oil shot up almost $3 a barrel Monday to a closing record of $107.90, extending a rally led by investors seeking a hedge against the tumbling U.S. dollar and inflation.

oil prices, energy prices

U.S. light, sweet crude oil [US@CL.1  Loading...      ()] jumped as high as $108.21 a barrel earlier. It had sunk to $104.08 in earlier trading. London Brent crude [GB@IB.1  Loading...      ()] was also up.

Fears of a U.S. recession following the biggest U.S. job losses in five years and strains in the credit market have sunk the dollar and raised expectations the Federal Reserve could cut interest rates again to prop up the economy.

Speculators have rushed into commodities as a hedge against rising inflation, helping to lift oil to average over $95 so far this year despite signs the faltering U.S. economy is crimping demand in the giant market.

"What you have seen over the last few months is fantastic strength in a whole range of commodities, all of which together significantly add to inflation and erode real incomes and profits,'' said Michael Saunders of Citigroup.

"If it were just oil it would be more manageable, but it's not ... What you are seeing now is far more widespread and therefore more damaging.''

A fall in U.S. crude oil inventories reported in government data released last week and OPEC's decision Wednesday to hold supplies steady have also boosted prices.

OPEC President Chakib Khelil was quoted Monday as saying speculation and political tension would keep prices at triple digits through the year, and some analysts are adjusting their forecasts higher.

"We certainly do see the balance for the rest of the yearveraging $100,'' said Paul Horsnell of Barclay's Capital. "But we are not going to say that it's going to stay above $100 for every single minute of every trading day for the rest of the year.''

Cartel officials insist that speculators are driving up oil prices and that supply and demand fundamentals do not support current levels.

Khelil said prices could retreat in 2009 with a recovery of the U.S. dollar following the election of a new U.S. president and as fundamentals reassert themselves.

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

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

CNBC HIGHLIGHTS

  • The show attracts a big TV audience every year, but this year it may take on even more importance.
  • …you'll want to be prepared. Tips for getting the most out of the post-Thanksgiving shopping frenzy.
  • Congressman Ron Paul explains to Squawk Box why he’s pushing legislation to audit the Federal Reserve.
  • CNBC’s Phil LeBeau took a test drive of GM’s flagship electric car. Here’s what he thought of the Volt.
  • The energy company Power Efficiency is building tools that regulate the power electric motors use.
  • CNBC’s technology reporter Jim Goldman guides you through the best gadgets to buy this holiday season.
ADD COMMENTS
Remaining characters


Current DateTime: 06:27:23 23 Nov 2009
LinksList Documentid: 29778428

Current DateTime: 10:08:23 23 Nov 2009
LinksList Documentid: 29779196

Current DateTime: 10:23:55 23 Nov 2009
LinksList Documentid: 29779199

Current DateTime: 09:12:15 23 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