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| Oil hits $102 for the first time | |
| (about 2 hours later) | |
| The price of oil has reached a new record high, a day after setting a previous record. | |
| US sweet crude traded at $102 a barrel, after climbing to $101.43 a barrel on Tuesday. | |
| Traders said the dollar's fall against the euro was the biggest catalyst as it makes oil attractive for non-dollar denominated currencies. | Traders said the dollar's fall against the euro was the biggest catalyst as it makes oil attractive for non-dollar denominated currencies. |
| Concerns that the producers' cartel Opec will cut supply when they meet next week have also been blamed. | Concerns that the producers' cartel Opec will cut supply when they meet next week have also been blamed. |
| Commodities are generally considered a hedge against inflation... we are therefore seeing these strong prices that have really little to do with oil market fundamentals Victor Shum, energy analyst | Commodities are generally considered a hedge against inflation... we are therefore seeing these strong prices that have really little to do with oil market fundamentals Victor Shum, energy analyst |
| The euro hit a high of $1.50 on Tuesday after traders bet that the Federal Reserve will have to cut rates below 3% to prevent the US economy from sinking into a recession. | The euro hit a high of $1.50 on Tuesday after traders bet that the Federal Reserve will have to cut rates below 3% to prevent the US economy from sinking into a recession. |
| US interest rate cuts generally lower the value of the dollar as traders move to other investments with a higher rate of return. | US interest rate cuts generally lower the value of the dollar as traders move to other investments with a higher rate of return. |
| Trend buying? | Trend buying? |
| Investors are also ploughing money into commodities and metals at the moment which are seen as a safer bet than equities and currencies in times of financial and economic uncertainty. | Investors are also ploughing money into commodities and metals at the moment which are seen as a safer bet than equities and currencies in times of financial and economic uncertainty. |
| Gold, platinum and wheat prices have all been reaching records on an almost daily basis, while speculative buying has also affected the oil price. London Brent crude was trading near $100 a barrel after surpassing that level on Tuesday. | Gold, platinum and wheat prices have all been reaching records on an almost daily basis, while speculative buying has also affected the oil price. London Brent crude was trading near $100 a barrel after surpassing that level on Tuesday. |
| "The US dollar weakened against the euro and the economic data also indicated that inflation in the US rose in January," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. | "The US dollar weakened against the euro and the economic data also indicated that inflation in the US rose in January," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. |
| "Commodities are generally considered a hedge against inflation. We are therefore seeing these strong prices that have really little to do with oil market fundamentals." | "Commodities are generally considered a hedge against inflation. We are therefore seeing these strong prices that have really little to do with oil market fundamentals." |
| A raft of gloomy US economic data out on Tuesday included lower consumer confidence and higher home foreclosures. | A raft of gloomy US economic data out on Tuesday included lower consumer confidence and higher home foreclosures. |