Crude oil hits $101.32 on increased demand, rate cuts

Crude oil advanced to a record $101.32 barrel in New York on speculation U.S. interest rate cuts will bolster fuel consumption. Federal Reserve Chairman Ben S. Bernanke has indicated the central bank will reduce U.S. interest rates if financial conditions and the availability of credit deteriorate. Rising world demand for raw materials helped send oil and commodities including soybeans and platinum to records this week.

Crude oil for March delivery rose 73 cents to $100.74 a barrel at 2:50 pm, a second consecutive record close above $100 on the New York Mercantile Exchange. Prices are up 74% from a year ago. The price of $101.32 reached today [20 Feb 2008] was the highest since oil futures began trading in 1983. The March contract expired today. "We should be looking at oil in the $120-to-$150 area by the end of the year without any major changes," said Peter Schiff, chief executive officer of Darien, Connecticut-based brokerage Euro Pacific Capital, which has $1 billion in customer accounts.

- This is a clear upward breakout of the consolidation range that we have been having between $85 and $100. For a short while, crude oil on the NYMEX hit $100.10 which was just 1 cent above the previous record high of $100.09 - it looked a bit shaky at that point but apparently it was enough to push it above $101.

In time to come we will be looking at $100 oil as a support level instead of resistance. I think it would be more than mildly interesting.

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