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Oil hits record high above 103 dollars
NEW YORK
Petroleumworld.com, Mar 03, 2008Oil prices briefly charted fresh record territory Friday, rising to 103.05 dollars as the dollar fell to all-time lows, before profit-taking trimmed the gains, traders said.
At the same time gold led other commodities higher, hitting a record 976.32 dollars per ounce as the troubled, cheaper dollar encouraged buyers.
"This was part of a broad-based commodities run based on the continued weakness of the dollar," said Petromatrix analyst Olivier Jakob.
A weak US currency boosts demand for dollar-denominated raw materials such as crude oil because it makes them cheaper for buyers using stronger currencies. The increased demand, if it outstrips the fall in the currency, leads to higher prices.
After striking a record high of 103.05, New York's main oil futures contract, light sweet crude for delivery in April, closed down 75 cents at 101.84 dollars per barrel.
In London, Brent North Sea crude for April delivery settled 80 cents lower at 100.10 dollars. The contract struck a record peak of 101.27 dollars on Thursday.
"There is good support to oil futures with the weak dollar, geopolitical tensions, fund interest and OPEC's (stance on) ... supplies," said Sucden analyst Andrey Kryuchenkov.
"Nevertheless, persistent economic fears and more risk aversion could trigger a correction ... as investors still fear that slower growth in the US could weigh on global growth estimates and dent demand for energy," he added.
OPEC, which pumps about 40 percent of the world's oil, was unlikely to change its production level at a meeting next week should crude prices remain around 100 dollars, acting Libyan Oil Minister Chukri Ghanem told AFP on Friday.
Ghanem said of Wednesday's planned OPEC meeting: "I think we won't do anything."
Ghanem, who is the head of the Libyan national oil company and is acting oil minister, also told AFP that he expected the price to remain at about 100 dollars.
The Organization of the Petroleum Exporting Countries, comprising 13 countries including Libya, is due to meet Wednesday in Vienna, Austria, to reconsider its production ceiling of 29.67 million barrels per day, excluding output by Iraq.
Key OPEC members Iran and Venezuela have called for the cartel to cut output ahead of an expected drop in demand during the second quarter as the northern hemisphere winter draws to a close.
According to analysts, their support for a cut has contributed heavily to oil's rise to record heights this week.
Story from AFP
AFP 29 2108 GMT 02 08
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