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| Oil races to fresh high above $97 | Oil races to fresh high above $97 |
| (about 3 hours later) | |
| Oil prices have risen to a record high above $97 a barrel, amid concerns over tight fuel stocks and a weak US dollar. | |
| US crude oil rose $3 to a high of $97.10 in trading on Tuesday, while the price of London Brent crude climbed to a record level of $93.12 a barrel. | |
| The price of gold also surged to a record peak of $826.40 an ounce on the weak dollar and fears of inflation spurred by the record high oil prices. | The price of gold also surged to a record peak of $826.40 an ounce on the weak dollar and fears of inflation spurred by the record high oil prices. |
| Gold is seen as a haven for investors in times of stock market uncertainty. | Gold is seen as a haven for investors in times of stock market uncertainty. |
| 'Bullish sentiment' | 'Bullish sentiment' |
| Oil prices fell $2 a barrel on Monday as investors worried that economic growth could slow in the US and curb demand for fuel, but soon resumed their seemingly remorseless climb towards the $100 mark. | Oil prices fell $2 a barrel on Monday as investors worried that economic growth could slow in the US and curb demand for fuel, but soon resumed their seemingly remorseless climb towards the $100 mark. |
| If we have a combination of a drawdown in inventories and a cold spell in the US, that could cause a surge in pricing Victor Shum, Purvin and Gertz | |
| The latest rise was triggered by a combination of the weak dollar, an attack on a oil pipeline in the Yemen and fears of fresh volatility in the Middle East after a series of deadly bombings in Afghanistan. | |
| "We seem to be seeing a tug of war between people taking profits and those coming into buy into dips, and they are effectively saying we can go past $100," said Mike Wittner at Societe Generale. | "We seem to be seeing a tug of war between people taking profits and those coming into buy into dips, and they are effectively saying we can go past $100," said Mike Wittner at Societe Generale. |
| The focus now is on the latest snapshot of US crude oil reserves expected on Wednesday. | |
| Analysts expect the stocks to have fallen by more than 1.5 million barrels in the past week, because of disruptions to short-haul Mexican shipments. | |
| Oil is seen as a good bet amid financial market turmoil | |
| In remarks released ahead of the weekly inventory figures, the US Energy Information Administration said it expected crude consumption to rise next year despite higher prices and for inventories to fall. | |
| "What we can expect going forward is extreme volatility in the oil market, driven by profit-taking and traders buying back positions," said Victor Shum, an analyst with energy consultancy Purvin and Gertz. | "What we can expect going forward is extreme volatility in the oil market, driven by profit-taking and traders buying back positions," said Victor Shum, an analyst with energy consultancy Purvin and Gertz. |
| "But the overall market sentiment is still bullish and prices appear to be on an uptrend towards the $100 mark. If we have a combination of a drawdown in inventories and a cold spell in the US, that could cause a surge in pricing," he added. | "But the overall market sentiment is still bullish and prices appear to be on an uptrend towards the $100 mark. If we have a combination of a drawdown in inventories and a cold spell in the US, that could cause a surge in pricing," he added. |