UpdateCrude futures hit new highs on dollar woes

27 February 2008 09:09  [Source: ICIS news]

(adds details on new record ICE Brent and NYMEX light sweet crude prices)

SINGAPORE (ICIS news)--Crude futures rose to new record highs on Wednesday in Asia with NYMEX light sweet crude hitting $101.89/bbl, up over $1/bbl, and ICE Brent futures climbing to $100.30/bbl on further weakness in the US dollar and cold weather in the US and Europe.

At 08.48 GMT, April NYMEX light sweet crude futures were trading at $101.85/bbl, up $0.97/bbl on Tuesday’s settlement price.

Earlier, it hit a new intraday record high of $101.89/bbl, up $1.01/bbl on Tuesday’s record settlement level of $100.88/bbl.

At the same time on Wednesday, April ICE Brent futures were trading at $100.38/bbl, up $0.91/bbl on Tuesday’s close, after earlier hitting a new record of $100.43/bbl, up $0.96/bbl on Tuesday’s close.

The US dollar fell to new lows against the euro and other currencies amid further worries over the US economy and the potential for additional Federal Reserve interest rate cuts.

The weakness in the US dollar attracted additional speculative funds into the energy markets as a hedge against inflation.

Further upward pressure was generated by colder winter weather in the US northeast and Europe which strengthened the heating fuels markets for gas-oil and natural gas.

Market expectation that OPEC will not raise output at its 5 March meeting was an additional bullish factor.

Crude prices were also supported by the ongoing Turkish military incursion into northern Iraq and rising geopolitical tensions between Iran and the west over Tehran’s nuclear programme and plans for further UN sanctions. Worries also persist over supplies from Venezuela and Nigeria.

Attention will be focused on US weekly data, due out later on Wednesday, which is expected to reveal a build of around 2.5m bbls in crude stocks. This would be the seventh consecutive week in which crude stocks have risen.

Gasoline stocks were expected to rise by around 300,000 bbls. However, distillate stocks were forecast to decline for a third straight week by around 2.1m bbls.

By: James Dennis
+65 6780 4359

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