New York : Crude oil futures set a record close Wednesday, the first trading day of year 2008, after briefly hit 100 U.S. dollars a barrel on concerns of tight supply and weak U.S. dollar.
Light, sweet crude for February delivery rose 3.64 dollars to settle at 99.62 dollars a barrel, refreshing its record close of 99.29 dollars set last November on the New York Mercantile Exchange (NYMEX) after briefly hit the 100 dollars landmark.
“The fact that oil briefly hit the psychologically important 100 dollars per barrel mark at around 12:10 p.m. EST highlights the bullishness that exists in the energy complex,” Wall Street Strategies’ senior research analyst Conley Turner told Xinhua. “We have been calling this trade for a few months now and today it has finally occurred, albeit briefly.”
“The reasoning behind the move had much to do with the reemergence of geopolitical concerns. In this case, supply disruptions in Nigeria, the 12th largest producer in the world and Africa’s largest, caused traders to bid up the price,” he said.
Crude futures jumped sharply Wednesday morning on supply concerns sparked by Nigeria unrest.
A total of 15 people, including four policemen, were killed on Tuesday. All the policemen, six militants and three civilians died when members of the Niger Delta Vigilante Movement invaded two police stations, Artillery Junction and a popular hotel in Port Harcourt, the capital city of Rivers State.
The Organization of Petroleum Exporting Countries (OPEC) said its member nations may not be able to meet demand as early as 2024stirred the crude prices’ rise.
Also providing a lift for prices is speculation that stockpiles in the United States declined for a 7th week, said Turner.
Stocks of crude in the United States were expected to have fallen 2.2 million barrels last week, the 7th straight week of decline, as refiners processed more crude. Weekly government data will be released Thursday.
“Additionally, the U.S. dollar fell in value against other major currencies today,” Turner added. “Oil prices have an inverse relationship the value to the dollar. Given this action, it is well within reason to expect the commodity to trade above the 100-dollar mark as the year progresses.”
In other NYMEX trading Wednesday, February heating oil futures rose 9.1 cents to settle at a record 2.7404 dollars a gallon after setting a trading record of 2.7465 dollars while February gasoline futures climbed 7.81 cents to settle at a record 2.5689 dollars a gallon after setting their own trading record of 2.5784 dollars.
In London, February Brent crude rose 3.37 dollars to settle at 97.84 dollars a barrel on the ICE Futures exchange.