By Javier Blas 2 hours, 2 minutes ago
Crude oil prices on Friday rose to a fresh all-time high above $90 a barrel as the US dollar sunk to a new low against the euro.
Persistent worries about tight supplies ahead of the winter peak season and fresh geopolitical tensions also helped to push prices higher.
Nymex November West Texas Intermediate hit $90.02 a barrel in overnight trading. It later was 10 cents higher at $89.57 a barrel, extending Thursday's $2.07 price jump. It is the sixth straight trading day that oil set a record high.
Edward Morse, chief energy economist at Lehman Brothers in New York, said that financial flows betting on further US dollar weakness ahead of the Group of Seven meeting and the US Federal Reserve meeting were propping up the oil price.
The dollar traded on Friday to $1.4303 against the euro, after touching earlier a record low of $1.4311 per euro. Investors are betting on a further interest rate cut when the Federal Reserve meets on October 31.
A lower dollar cuts the purchasing power of the barrel, suggesting that producing countries, such as Saudi Arabia, would try to keep the oil price higher to compensate for it. The strength of the euro, the sterling pound and other currencies also mean that some countries, particularly in Europe, are partially insulated from the oil price rally.
From Yahoo News. For more go here.
NVDL: Brent Crude - which is the price SA pays for crude - is $83.88, down from $85 last night. That these prices aren't making front page headlines* demonstrates the extent of our chronic delusion and distraction. Also, yes there is a relationship between the high oil price and the low dollar. Read the implications for this here.
In the face of these headlines we still see stories in the paper gleefully shouting: Petrol Prices Likely to Fall. What this does is send out a mixed message, effectively transforming an attitude of rational panic to paralysis and even serenity. Not good.
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