Demand sends oil to record US$101.32
Crude oil advanced to a record US$101.32 barrel in New York on rising demand and concern inflation will erode the value of alternative investments. A weakening US dollar and increasing world demand for raw materials sent oil and commodities, including soybeans and platinum, to records this week. US Federal Reserve chairman Ben Bernanke has indicated to lawmakers the Fed will cut US interest rates if financial conditions and the availability of credit deteriorate. Crude oil for March delivery rose 73 cents, or 0.7%, to settle at $100.74 a barrel, a second consecutive record close above $100 on the New York Mercantile Exchange. Prices are up 74% from a year ago. The price of $101.32 reached Wednesday was the highest since oil futures began trading in 1983.
(Calgary Herald 080221)
Yesterday it was fears that OPEC was going to cut production rates at their next meeting (not like they can increase it....even if they say they can...), and today its about people investing in oil futures because no other investments will be as profitable due to inflation? Man, that's a new one. It sounds as if investment brokers are propping up the price due to their own devices. Talk about a speculation premium......oil is now at the highest inflation-adjusted price EVER.