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Oil hits record at $108 a barrel | |
(about 4 hours later) | |
The price of crude oil has hit an all-time high for the fifth time in six trading sessions. | |
New York sweet light crude touched a new high of $108.21 a barrel, before edging down to trade at $107.93. | |
Analysts say traders are investing in commodities to protect themselves against the falling dollar. | |
Another factor pushing up prices is last week's decision by producers' cartel Opec to keep output unchanged, despite rising demand in China. | |
The dollar has been reaching 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. | 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 hit $104.42 at one point on Monday - also a record. | |
Financial strain | 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. | 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. | 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. | The high oil price is making petrol and energy costs more expensive around the world, putting financial pressure on businesses and household budgets. |