Archive for the ‘falling dollar’ Category

Oil rises to new record as dollar drops

March 17, 2008

By GILLIAN WONG, Associated Press

SINGAPORE – Oil prices jumped to an all-time trading high near $112 a barrel Monday in Asia as the tumbling U.S. dollar and plunging stock markets prompted investors to seek shelter in commodities.

An oil rig in a file photo. Oil jumped to a record above $111 ...
Oil jumped to a record above $111 a barrel on Monday, as a surprise weekend cut in the Federal Reserve discount rate and the fire sale of stricken investment bank Bear Stearns sent the dollar to all-time lows.(File/Reuters)

Investors fled the dollar after a surprise move by the U.S. Federal Reserve on Sunday to provide cash to financially squeezed Wall Street investment houses pushed the battered greenback deeper into multiyear lows against the yen.

“The Fed’s move overall will help the liquidity of the U.S. dollar, and that will really further soften the dollar,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. “Meanwhile, investors seem to be just following the mantra of buying oil and commodities to hedge against the falling dollar and inflation.”

Light, sweet crude for April delivery spiked to a record $111.80 a barrel — up $1.59 from Friday’s close — in electronic trading on the New York Mercantile Exchange, midafternoon in Singapore. It later slipped back to $111.61 a barrel.

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