More Videos
MOST SHARED
- Marc Faber: 100% Chance of Global Recession
- Zero China Growth Is ‘Probable’: Gordon Chang
- Citigroup Lost $20 Million on Facebook IPO Trades
- What College Tuition Will Look Like in 18 Years
- China Growth Risks Signal Need for Fiscal Action
- Romney Leads Poll Of Small Business Owners
- 5 Spots Where the Dollar Buys a Great Vacation
- How to Trade on the Jobs Report
- Citigroup Lost $20 Million on Facebook IPO Trades
- Sticker Shock: What College Is Likely to Cost in 18 Years
- JPMorgan to Shake Up Risk Team After Big Loss: Report
- Icahn Raises Stake in Chesapeake, Wants Board Seats
- Marc Faber: Chance of Global Recession Is Now 100%
- Week Ahead: Europe Has Wall Street Bull on Short Leash
- What Happened to Stocks? Most Unloved in 50 Years
- Cool Jobs: From Gold Stacker to Bed Tester
- Many Greeks Moved Their Money Abroad Long Ago
- A New Look at the ‘New Poor’
- Six Pack: Beer Buzz of the Week
- Greek Exit Could Trigger 50% Fall in Euro Stocks: Analyst
- Under Pressure, FHA Skews to Wealthier Home Buyers
- Big Stock Upside for Hudson City Deal: Analyst
- 5 High-Yield Stocks Ready to Boost Dividends
- Yoshikami: Four Things You Need to Know About Gold Now
- Steinbock: The Euro Zone Endgame Begins
- Option Bulls Take Another Shot on Idenix
Oil Hits Record Above $140 on Weakening Dollar
Text Size 
Oil futures climbed to a new record near $143 a barrel Friday as the dollar weakened against the euro, confirming expectations that the falling greenback, a major factor in crude's stratospheric rise, will extend its decline and add to oil's appeal.
 |
Retail gas prices inched lower overnight, but are likely to resume their own trek into record territory now that oil futures have broken out of the trading range where they had been for nearly 3 weeks.
Light, sweet crude [US@CL.1 Loading... ()] for August delivery rose as high as $142.99 a barrel on the New York Mercantile Exchange before pulling back sharply in a spate of late-day profit-taking to settle up 57 cents at a record $140.21.
London Brent crude [GB@IB.1 Loading... ()] was also higher.
On Thursday, the contract shot past $140 and rose more than $5 to a new settlement record.
The latest record came as the dollar fell against the euro in afternoon trading, having traded roughly unchanged for much of the day.
"The dollar was slightly stronger, and when it gave up its gains, that gave oil the green light," said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com.
The market now believes the Federal Reserve is unlikely to raise interest rates in the near future; since higher rates tend to strengthen the dollar, traders are anticipating that it will continue to fall and, consequently, that investors will keep turning to commodities including oil as a hedge against inflation.
"Oil's back in favor, especially with people bailing out of the stock market," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.
The stock market's recent swoon is also sending investors in search of higher-yielding investments.
On Thursday, the Dow Jones industrial average fell nearly 360 points, and in afternoon trading Friday was down more than 100 points.
"When money has nowhere to go, it is parked in commodities as it is one of the few investment instruments that actually rises the more money you pour into it," said Oliver Jakob, an analyst at Petromatrix Gmbh, in Switzerland in a note.
With oil over $140 a barrel, traders are now expecting to see $145 and even $150, analysts say.
At the pump, meanwhile, gas prices slipped 0.1 cent overnight to a national average of $4.066 a gallon, according to a survey of stations by AAA, the Oil Price Information Service and Wright Express.
Gas prices have fallen slightly from their June 16 record of $4.08 a gallon, but will likely resume their record breaking rise if oil futures keep trending higher. That seems likely.
Oil has more than doubled in the past year due to the dollar's decline, but also because of rising global demand, particularly in fast-growing economies such as China and India. Supply outages in the Middle East and Nigeria have also contributed, as has falling production in Mexico.
The sharp increase in oil prices has driven a similar rise in fuel prices.
Gas prices are $1.09 higher than a year ago, and diesel prices were up $1.85 over the past year at a national average of $4.763 a gallon on Friday.
Diesel is used to fuel most industrial vehicles, trucks, trains and ships, and its increase is a large part of the reason food and consumer goods prices are rising, putting additional pressure on consumers already paying $4 and more for gas.
Diesel prices peaked at $4.797, also on June 16, but are likely to push past that record if oil futures keep rising.
In other Nymex trading Friday, July gasoline futures fell 1.01 cents to settle at $3.5012 a gallon after earlier rising to a trading record of $3.585. July heating oil futures rose 2.32 cents to settle at $3.9066 a gallon. August natural gas futures fell 5 cents to settle at $13.198 per 1,000 cubic feet.
- The Nasdaq has suffered the most from the EU crisis showing there's risk in the usual tech stocks.
- Targeting more Millennials is just one of the items brewing for consumers in the world of spirits.
- It seems many people may need a reminder of how NOT to act on a plane. Here are a few tips.
- Here are some very unusual roadside stops along American highways that might peek your interest.
- How three generations of Americans are dealing with the finances of retirement.
Data is a real-time snapshot *Data is delayed at least 15 minutes
