NEW YORK, April 22 (Xinhua) -- Crude futures
approached 120 U.S. dollars a barrel Tuesday on the weak U.S. dollar and supply
concerns.
Light, sweet crude for May
delivery, which expired Tuesday, hit 119.90 dollars on the New York Mercantile
Exchange, refreshing its intraday high. The May contract settled at 119.37 a
barrel, a new record high, up 1.89 dollars from previous
day.
Hedge against
inflation
"Crude oil continued its upward march today due to
host already familiar factors," Wall Street Strategies' senior research analyst
Conley Turner told Xinhua. "Among the primary reasons being was the fact that
the dollar declined to an all time low against the euro."
The euro surged above 1.60-dollar level for the first
time Tuesday as officials at the European Central Bank (ECB) officials indicated
that they will increase interest rates if inflation doesnot come down. The
15-nation single currency euro reached as high as 1.6018 dollars.
"This prompted market participants to flow into
commodities as these act as a hedge against inflation," said Turner.
"The fact that the euro is strengthening against the
dollar only fosters higher oil prices. The U.S dollar has an inverse
relationship to the price of a barrel of crude. As opposed to their U.S.
brethren, ECB officials appear determined to combat rising inflation," added the
analyst.
The slumping U.S. greenback has helped boost
dollar-denominated commodities like oil and attracted speculative inflows from
hedge funds.
Crude prices surged about 24
percent this year, nearly double their closing price a year
ago.
Supply
concerns
"Another factor contributing for the days was the
disruption in supplies in Nigeria due to attacks by rebels on production
facilities," said Turner. "Also, there is a threat of a strike at a refinery in
the U.K. that is affecting the price move today."
Nigeria, the biggest crude oil producer in Africa, is
running below its capacity because of unrest in the nation. Royal Dutch Shell
said Monday that it had been forced to shut in about 169,000barrels a day of
crude exports through May after a separate pipeline attack last week.
A threatened labor strike at Ineos PLC's 196,000
barrel-a-day Grangemouth refinery in the U.K. also stirred worries that a
shutdown could disrupt production from North Sea oil fields.
"At this point, the momentum is clearly in favor of
the oil bulls. While, a short term pull back will inevitably occur, it is
extremely difficult to predict when this will occur," Turner added.
"In fact, many a fortune has been lost trying to
predict tops. Even with a pull back, it is likely to see oil at 125 dollars per
barrel sooner rather than later," he pointed out.
Other energy futures also set new record on Tuesday.
May gasoline futures rose 3.73 cents to settle at 3.0164 dollars a gallon after
rising to a trading record of 3.025 dollars, while May heating oil futures hit
their own trading record of 3.35 dollars.
Dollar falls to record low against
euro on ECB comment
New York, April 22 (Xinhua) -- The dollar hit a record new
low against the euro on Tuesday as two European Central Bank governors indicated
that the ECB might raise rates if inflation didn't subside.
The question of a rate hike is "fully justified," ECB
Governing Council member Yves Mersch told Financial Times Deutschland. He raised
doubts about whether the ECB will reach its inflation goal next year. Full story
Crude futures close above 117 dollars
for first time
NEW YORK, April 21 (Xinhua) -- Crude
futures closed above 117 U.S. dollars a barrel for the first time Monday due to
supply concerns.
In Nigeria, a key producer of high-quality light
crude, about 169,000 barrels a day of crude production was shut in following an
attack on a pipeline operated by Shell Petroleum Development Co. Full story
Weak dollar not sole reason for high oil prices
VIENNA, April 17 (Xinhua) -- OPEC's average daily oil prices have set records 16 times since the beginning of this year and soared to 106.65 U.S. dollars per barrel (dpb) Wednesday, the Vienna-based cartel said Thursday.
Oil prices have surged higher since 2007 and regularly hit new peaks, so that price breaking is no longer news but a "routine" matter.
International oil market analysts attribute the high prices mainly to the large amount of speculation in the commodity market, inspired by the weak dollar. Full story
