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Oil reaches new record above $99 | Oil reaches new record above $99 |
(about 18 hours later) | |
Oil prices came close to breaching the $100 a barrel mark on Wednesday as the dollar remained weak, tempting traders towards commodities. | |
US light, sweet crude hit a record of $99.29 before slipping back to $97.29, down 74 cents on the days trading. | |
Brent crude, which hit an all-time high of $96.53 dollars, rose 50 cents to $95.99 a barrel. | |
Tight supplies and winter demand have also contributed to oil prices climbing by about 45% since August. | |
US crude oil inventories fell by 1.1 million barrels last week, the US Energy Information Administration said, surprising analysts who had predicted a rise of 600,000 barrels. | |
Federal Reserve predictions of slower than expected growth in the US next year have also boosted prices. | Federal Reserve predictions of slower than expected growth in the US next year have also boosted prices. |
'Speculative money' | 'Speculative money' |
Analysts examining minutes from the Federal Reserve's latest rate-setting meeting, released on Tuesday, said there was a good chance that there would be another interest rate cut in December. | Analysts examining minutes from the Federal Reserve's latest rate-setting meeting, released on Tuesday, said there was a good chance that there would be another interest rate cut in December. |
This would be expected to weaken the dollar further as commodities and other currencies and became more attractive to investors, forcing up oil prices, they said. | This would be expected to weaken the dollar further as commodities and other currencies and became more attractive to investors, forcing up oil prices, they said. |
"Oil prices have every reason to rise," said Koo Ja-kown, crude analyst at Korea National Oil Corp (KNOC). | "Oil prices have every reason to rise," said Koo Ja-kown, crude analyst at Korea National Oil Corp (KNOC). |
"Speculative money is coming into the market as the dollar is weakening. On top of that, there are supply concerns for winter fuel." | "Speculative money is coming into the market as the dollar is weakening. On top of that, there are supply concerns for winter fuel." |
Oil prices had already risen on Monday and Tuesday, after leaders of producers' cartel Opec decided not to increase production at their latest meeting. | Oil prices had already risen on Monday and Tuesday, after leaders of producers' cartel Opec decided not to increase production at their latest meeting. |
Traders will be carefully watching Wednesday's weekly crude inventory data, released in the US by the Energy Information Administration. | Traders will be carefully watching Wednesday's weekly crude inventory data, released in the US by the Energy Information Administration. |
Adjusting for inflation, US light crude's record peak of $101.70 came in 1980 against a backdrop of war between Iraq and Iran. | Adjusting for inflation, US light crude's record peak of $101.70 came in 1980 against a backdrop of war between Iraq and Iran. |
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