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Oil hits $98 on weakening dollar Oil passes $98 on weaker dollar
(about 4 hours later)
The ever-weakening dollar and fresh worries about winter fuel supplies have sent US oil prices to $98 a barrel. The ever-weakening dollar and fresh worries about winter fuel supplies have sent US oil prices pass $98 a barrel.
The effect was worsened by storms in the North Sea on Tuesday, which disrupted supply as prices inched closer to the $100-a-barrel mark. With global crude prices further lifted by bad weather hitting North Sea oil rigs, US light crude touched as high as $98.62 in early Wednesday trading.
London Brent crude also hit a record high of $94 a barrel in Asian trading. London Brent crude also increased, hitting a all-time peak of $95.19.
The weaker dollar has been driving up oil prices because some investors have been using the commodity as an alternative to holding dollars.The weaker dollar has been driving up oil prices because some investors have been using the commodity as an alternative to holding dollars.
On the other hand, it makes oil relatively cheaper for anybody outside the US.On the other hand, it makes oil relatively cheaper for anybody outside the US.
In recent sessions, record highs have been followed by falls of at least $1 a barrel. Nonetheless, some analysts say that $100-a-barrel oil is inevitable. Evacuations
US light crude later pulled back to $98.25 by mid-morning trading in Europe, while Brent slid to $94.89.
However, the prices were still up on Tuesday's closes.
Analysts say that $100-a-barrel oil is inevitable.
"We're going to get $100 before too long," said Kevin Norrish of Barclays Capital.
"I think we'll get there," said Dariusz Kowalczyk at CFC Seymour. "The factors that have been driving the recent trend are still in place.""I think we'll get there," said Dariusz Kowalczyk at CFC Seymour. "The factors that have been driving the recent trend are still in place."
Adjusting for inflation, US light crude's record peak of $101.70 came in 1980 against a backdrop of war between Iraq and Iran.
Predicted storms in the North Sea have seen a number of producers evacuate their facilities, such as BP and ConocoPhillips.