Oil prices set new highs, topping $110
Oil prices are trading at record highs above $110 a barrel, driven by the further weakening of the dollar.
Light, sweet crude for April delivery had reached $110.48 in early afternoon European electronic trading Thursday, March 13, on the New York Mercantile Exchange and prices were expected to keep rising. On March 12, it set a record trading high of $110.20 a barrel.
The dollar fell to a new low against the euro March 12, attracting new buyers to the oil market. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is weak. Many analysts believe the dollar’s decline is the reason crude futures have surged to new records in 11 of the past 12 sessions, despite the fact that crude supplies have risen 10.2 percent since early January.
“I tend to think that every (price) dip looks like a buying opportunity right now,” said Linda Rafield, senior oil analyst at Platts, the energy research arm of McGraw-Hill Cos.
Many analysts argue that oil prices can’t be justified by the market’s underlying supply and demand fundamentals. Yet evidence of weak demand amid growing supplies hasn’t stopped oil prices from rising in the past, particularly when the dollar is falling.
—Compiled from AP reports
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