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Oil passes $98 on weaker dollar Oil passes $98 on weaker dollar
(about 2 hours later)
The ever-weakening dollar and fresh worries about winter fuel supplies have sent US oil prices past $98 a barrel.The ever-weakening dollar and fresh worries about winter fuel supplies have sent US oil prices past $98 a barrel.
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. With global crude prices further lifted by bad weather hitting North Sea oil rigs US light crude touched $98.62 in early trade, before slipping to $98.16.
London Brent crude also increased, hitting a new high of $95.19. London Brent crude also increased, to a $95.19 high, before falling to $94.56.
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.
EvacuationsEvacuations
US light crude later pulled back to $98.25 by mid-morning trading in Europe, while Brent slid to $94.89.US light crude later pulled back to $98.25 by mid-morning trading in Europe, while Brent slid to $94.89.
How China and India respond to the rising threats to their energy security will also affect the rest of the world International Energy AgencyHow China and India respond to the rising threats to their energy security will also affect the rest of the world International Energy Agency
However, the prices were still up on Tuesday's closes.However, the prices were still up on Tuesday's closes.
After oil prices have now risen 60% this year, analysts say that $100-a-barrel oil is inevitable.After oil prices have now risen 60% this year, analysts say that $100-a-barrel oil is inevitable.
"We're going to get $100 before too long," said Kevin Norrish of Barclays Capital."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.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.Predicted storms in the North Sea have seen a number of producers evacuate their facilities, such as BP and ConocoPhillips.
Gold pricesGold prices
The dollar's current weakness has also seen prices of other commodities rise sharply, most notably gold, which is continuing near 27-year highs.The dollar's current weakness has also seen prices of other commodities rise sharply, most notably gold, which is continuing near 27-year highs.
Gold prices have also been lifted by the higher cost of oil, as investors see it as a haven against the inflation risk caused by increased crude costs.Gold prices have also been lifted by the higher cost of oil, as investors see it as a haven against the inflation risk caused by increased crude costs.
Separately on Wednesday, the International Energy Agency (IEA) warned that the rapid economic growth in China and India could have devastating consequences for the world's energy supply.Separately on Wednesday, the International Energy Agency (IEA) warned that the rapid economic growth in China and India could have devastating consequences for the world's energy supply.
Calling on both countries to increase efforts to curb their demand for oil, petrol and natural gas, the IEA said the two countries would account for about 45% of the increase in global energy demand by 2030.Calling on both countries to increase efforts to curb their demand for oil, petrol and natural gas, the IEA said the two countries would account for about 45% of the increase in global energy demand by 2030.
"How China and India respond to the rising threats to their energy security will also affect the rest of the world," said the Paris-based agency."How China and India respond to the rising threats to their energy security will also affect the rest of the world," said the Paris-based agency.