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| Version 2 | Version 3 |
|---|---|
| Oil hits $102 for the first time | Oil hits $102 for the first time |
| (about 12 hours later) | |
| The price of oil has hit a record high for the second day running, touching $102.08 a barrel for US sweet crude. | The price of oil has hit a record high for the second day running, touching $102.08 a barrel for US sweet crude. |
| However, the figure is still surpassed in inflation-adjusted terms by the peak of $102.53 reached in 1980, the International Energy Agency says. | However, the figure is still surpassed in inflation-adjusted terms by the peak of $102.53 reached in 1980, the International Energy Agency says. |
| The oil price surge is supported by traders switching their cash out of shares and currencies and into commodities, traders say. | The oil price surge is supported by traders switching their cash out of shares and currencies and into commodities, traders say. |
| US sweet crude eventually fell back to close down $1.24 at $99.64 a barrel. | |
| London's Brent was down $1.15 to $98.32. | |
| Fears that producers' cartel Opec will cut supply have also been blamed for oil's recent highs. | |
| "[Opec] appears reluctant to heed requests from Western leaders to add more barrels to the market in order to soften prices," said Robert Laughlin at MF Global. | "[Opec] appears reluctant to heed requests from Western leaders to add more barrels to the market in order to soften prices," said Robert Laughlin at MF Global. |
| London Brent crude was trading near $100 a barrel after surpassing that level on Tuesday. | London Brent crude was trading near $100 a barrel after surpassing that level on Tuesday. |
| 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 |
| Trend buying? | Trend buying? |
| Other analysts say a bigger catalyst in the latest oil surge is continued uncertainty in the global economic outlook, which is causing turmoil in currency and equity markets. | Other analysts say a bigger catalyst in the latest oil surge is continued uncertainty in the global economic outlook, which is causing turmoil in currency and equity markets. |
| The euro hit a high of $1.5135 on Wednesday 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. |
| Investors are pumping cash into commodities and metals, which look a safer bet because of continued high demand in Asia to feed the region's industrial boom. | Investors are pumping cash into commodities and metals, which look a safer bet because of continued high demand in Asia to feed the region's industrial boom. |
| Gold reached a historic high at $957.60 on continued power supply problems in South Africa, while aluminium and copper prices also rose. | Gold reached a historic high at $957.60 on continued power supply problems in South Africa, while aluminium and copper prices also rose. |
| "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. |