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Oil hits record of $107 a barrel | Oil hits record of $107 a barrel |
(about 1 hour later) | |
Crude oil prices have hit an all-time high for the fifth time in six trading sessions. | |
New York sweet crude added $1.85 to touch $107 a barrel, before falling back to trade at $106.6. | |
The price beats the inflation-adjusted high set in April 1980 although the two measures are not strictly comparable. | |
The oil price is also being supported by last week's decision by producers' cartel Opec not to raise supply, despite rising demand in China. | |
Many analysts believe that traders are also buying oil, priced in dollars, to protect the value of their money against the sliding currency. | |
The dollar has been ticking off new lows against the euro and other key currencies since last summer, and was hit again on Friday by a US employment report showing the labour market at its weakest in five years. | |
This has prompted traders to seek refuge in commodities, including oil and gold, which are more likely to sustain their value than the greenback. | |
In Europe, Brent crude gained 69 cents to trade at $103.07 a barrel, also a new record. | |
Financial strain | |
Analysts at the International Energy Agency said that real oil prices are higher than the previous peak reached in April 1980, which was $102.53 in today's money. | |
But the oil price measure used then was slightly different to the one in current use and so it is difficult to make an accurate comparison. | |
The high oil price is making petrol and energy costs more expensive around the world, putting financial pressure on businesses and household budgets. |