Oil Finished At $110.04 A Barrel; US Dollar Weakens Further

March 14, 2008

(Long Island, N.Y.) Sweet and Crude oil deliveries for April this year settled at $110.04 a barrel on Thursday which is a 0.29 cents decline after setting a new all-time high the previous day at the New York Mercantile Exchange. Twelve of the last thirteen trading sessions yielded record high’s for oil futures deliveries.

On Wednesday, Oil prices surged to an all-time high of $110.33 a barrel on inflation adjusted rates but retreated yesterday after investors exposed initial fantasy on commodity trading rather than at the oil industry. Also factoring in for the decline was OPEC’s decision to throw off the US governments request for an increase in oil deliveries for next month.

“When there are no immediate supply side concerns that justify surging to new record everyday, some pullback is inevitable,” said Victor Shum, an energy analyst with Purvin & Gertz. “This is just part of the volatility of trading. In the near term, despite the fact that oil pricing is pulling farther from market fundamentals, this bull run could continue because of the expectation of further (Fed) interest rate cuts and continued weakening of the U.S. dollar,”

Experts surmise that the oil price ascent the last few months bear heavily on the declining amount of the US dollar against major currencies worldwide. As the dollar falls, Oil stocks which are bought and sold in US dollars become more attractive to international investors. On Friday, the US dollar hit another all-time low against the Euros as it fell at $1.5651 to a Euro.

“The dollar traders will be watching the release later today of the U.S. inflation number for February as an indicator of the Fed decision next Tuesday,” said Olivier Jakob, of Petromatrix in Switzerland. “What central banks decide next Tuesday should be more relevant to oil prices than any recent OPEC meetings.”

Posted by News LI Editor · Edited by Brianna - Filed Under Money