Crude oil rises to record $112.48 on falling dollar

This article belongs to the NYMEX crude oil price records story arc.

bloomberg.com :

Crude oil rose to a record as investors purchased futures contracts to hedge against the falling dollar after the Group of Seven [G7] failed to end the currency's slide. Crude oil for May delivery climbed 72 cents to $112.48 on the New York Mercantile Exchange, the highest since futures began trading in 1983. Prices have gained 77% from a year earlier.

The dollar was at $1.5827 per euro as of 11:19 a.m. in Tokyo. It touched $1.5913 on April 10, the highest level since the European currency's debut in 1999. China, the world's second-largest oil consumer, imported 25% more crude in March [2008] versus a year ago, offsetting projected demand declines in the U.S.

- The funny thing is, I own a bunch of shares in various oil companies and energy income trusts, but I have yet to buy into oil itself as a commodity. I was looking to buy into the USO ETF, the US Oil Fund, which buys directly into the NYMEX front-month crude oil futures, but nearly each and every time the price has been running away from me and breaking new records. Classic case of waiting for support levels and it goes off and breaks resistance levels instead, and setting new records along the way.

Speaking of resistance levels, now that we're past $110 resistance, the next levels look to be $120, and then $150 and then $200. Support levels are around $105, $100, $89, and $85, and like I always say, don't count on the last two or three.

As for the falling dollar, that is a very convenient scapegoat and certainly is an important factor, but as every peakoiler knows, the real story lies in the supply situation. By the way, for those interested, Matt Simmons has a new presentation up titled "Peak Oil's Investment Implications" - check out the oil field decline rate charts, especially those of the offshore oil fields. Scary stuff.

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