Crude oil prices surge to a new high of $107.85
11 March 2008
Crude oil prices hit a new high of $107.85 after hitting five new highs in the last six sessions.
With a consistently weakening dollar to the yen and euro, this price increase was expected, say analysts. Various financial leaders have vexed about the volatile movement of exchange rates after the dollar hit a 3-year low against the yen.
Smart investors are buying oil and gold, to hedge against the dollar. Oil and gold are seen to maintain their value, and with a further dip in interest rates, leading to a further weakening of the dollar, this seems to be a wise decision.
New York sweet light crude was at $107.85 and reached a high of $108.21 on Monday. London Brent also settled at $104.08 after Monday's high of $104.82
Last week, OPEC decided to the keep output unchanged even though there was a rising demand from China. This was a key factor for the increase in prices.
OPEC has picked on speculators for the increasing prices, however, the International Energy Agency's (IEA) latest monthly report has detailed that speculation is not the only reason and that high oil prices are here to stay.
The IEA also said that the economic slowdown in the US may curb the oil demand from the West, but that would be set off by an increased demand from the rest of the world.