Crude oil hits $102.08 as weak dollar boosts commodities prices

Crude oil rose to a record as a weakening dollar spurred investors to buy commodities priced in the U.S. currency. Futures jumped in New York and London as the dollar fell to an all-time low against the euro. Crude oil for April delivery $1.20 to $102.08 a barrel in electronic trading on the New York Mercantile Exchange. The dollar weakened to $1.5055 a euro, the lowest since the European single currency was introduced in 1999.

OPEC crude-oil supply will fall 200,000 barrels a day, or 0.6%, to 32.45 million barrels a day this month, according to preliminary estimates from PetroLogistics Ltd. The group supplied 32.65 million barrels a day in January, data from the Geneva-based tanker-tracking service showed. Ministers from the 13 members of the Organization of Petroleum Exporting Countries are scheduled to meet in Vienna on March 5 to discuss oil quotas. OPEC produces more than 40% of the world's crude oil.

- Crude oil has been smashing records lately. I see support levels at $100, $95, $89 and $85 and I don't think it will hit the last 2 or 3.

US dollar sinks to new lows, gold price hits $955.70 all-time record, crude oil hits $101.43 record high

iht.com :

The dollar sank to a record low against the euro on Wednesday [27 Feb 2008], breaking the psychologically important $1.50 level. The euro surged as high as $1.5050, its highest level since the single currency was introduced in 1999. The dollar hit an all-time low against a basket of currencies a day after U.S. consumer sentiment was reported to have sunk to a five-year low, offering more proof that the world's largest economy is struggling. The report, along with recent weak retail sales and manufacturing data, has reinforced expectations that the U.S. Federal Reserve will have to cut interest rates further, pressuring the dollar. Broad weakness in the U.S. currency pushed the US dollar index [USDX] to a record low 74.509.

The weakening dollar also sparked a rally in commodities and metals. Oil extended its rally, benefiting from the slumping dollar. Analysts also cited growing fuel demand and expectations that the OPEC cartel will not increase production at its meeting in early March as other key factors. Crude oil futures rose to a record $101.43 in US trade on Tuesday [26 Feb 2008]. Gold roared to a historic high of $955.70 an ounce, well above the $946.60/947.40 seen in late U.S. trade. Bullion prices have risen more than 14% so far this year.

- As the dollar burns, commodities take off. Oil has smashed through resistance at the earlier records of $100.00, $100.09, and is now consolidating solidly at the $101 level. A couple of days ago, I remarked that it was crazy to talk about consolidation of crude oil at the $99+ level. Well, it's even crazier now. $100 is the new support level, just like I said it would be, followed by $95, $90 and $85, but don't bet on the last two. We're in triple-digit territory now.

As for gold, it has broken through the $950 barrier which had been serving as resistance up until this point. It had been turned back twice before just as it reached $948 and then $949, and now that it has broken through, $950 is now support, followed by $925, $900, and $850, and I wouldn't really bet on the last 2. I am still thinking about a short consolidation between 925-975, but after that, gold is headed for $1000 and beyond.

(2008-02-27 12:51:13 SGT) [Biz] Permalink Comments [2]

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