Oil prices surpassed $103 a barrel
- From: Protagonist <szaki10@xxxxxxxxxxx>
- Date: Fri, 29 Feb 2008 00:47:07 -0800
I should get my wages in oil, soon!
JS
INGAPORE - Oil prices surpassed $103 a barrel for the first time Friday as persistent weakness in the U.S. dollar and the prospect of lower interest rates attracted fresh money to the oil market.
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Prices were supported by comments Thursday from Federal Reserve Chairman Ben Bernanke, who said the American economy is not immediately threatened with stagflation, a combination of economic weakness and rising inflation.
Investors chose to see the comments as confirmation of their beliefs that the Fed will continue cutting interest rates to try to shore up the economy.
Lower U.S. interest rates tend to weaken the dollar, and crude futures offer a hedge against a falling dollar.
"Due to the weakening dollar and the rising fear of inflation, investors have put money into commodities, oil included," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
"Commodities, as tangible assets, do not face as much inflationary threat as opposed to holding a currency," Shum said. "Even though the value of money is changing, the asset continues to have an intrinsic value."
Light, sweet crude for April delivery jumped to a new trading record of $103.05 a barrel in Asian electronic trading on the New York Mercantile Exchange before slipping back to $102.92 a barrel, up 33 cents.
On Thursday, the contract jumped $2.95 to settle at a record $102.59 a barrel.
http://news.yahoo.com/s/ap/20080229/ap_on_bi_ge/oil_prices
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