OIL PRICE AT RECORD $100.00 A BARREL

[Anonymous]

Oil price at record $100 a barrel
Oil has traded at $100 a barrel for the first time.
Violence
in Nigeria, Algeria and Pakistan, the weak US dollar and the threat of
cold weather have all raised prices after the new year break.Light
sweet crude rose $4.02 to $100 a barrel in New York, prompting a drop
in shares and a surge in gold prices.There are concerns that the high
price of oil will stoke inflation at a time when many central banks are
trying to cut interest rates to stimulate growth.US shares had already
been hit on Wednesday by figures showing that the manufacturing sector
was contracting.After oil broke the $100 barrel they fell further, with
the Dow Jones trading 215.1 points, or 1.6%, lower at 13,049.73.”All of
the factors that pushed us above $80 are now moving us higher,” said
Peter Beutel at Cameron Hanover in Connecticut.”Until we get more
supply or demand starts to take a hit, there is no reason we can’t see
any number.”

‘Frivolous’
But some analysts played down the
relevance of passing the $100 mark.”The entire focus on $100 oil is
frivolous,” said Tim Evans at Citigroup Futures Research in New
York.”It is not a magic number. It doesn’t suddenly make this a
fundamentally strong market.”Trading volumes were about half of their
usual levels as traders returned from their new year breaks, which may
have exaggerated the effect of speculative transactions, analysts
said.”I would imagine the speculators are the biggest drivers today,”
said Phil Flynn from Alaron Trading in Chicago.The oil-producers’
cartel Opec has also blamed speculators for the high price of crude and
said that there is plenty of the fuel in the market to meet demand.

President
Bush has said he will not be drawing on the US Strategic Petroleum
Reserve (SPR) to try to bring down prices.”This president will not use
the SPR to manipulate (oil prices),” White House spokeswoman Dana
Perino said.”Doing a temporary release of the SPR is not going to
change prices very much.”

Moving on up?
There are those who
believe that oil prices can rise significantly higher.While daily price
rises have been blamed on unrest in oil-supplying countries such as
Nigeria, a underlying and significant factor has been an increase in
demand from China and India.”$100 is just the beginning,” said Zachary
Oxman, senior trader at Wisdom Financial in California.”This is kicking
off what you are going to see this year. There will be huge moves up in
gold and huge moves up in crude.” 

[Author]

January 2, 2008 at 2:07 PM