Oil Ends Turbulent Day Higher on Dollar
NEW YORK — Crude oil futures rose to another record close Thursday, boosted once more by the dollar's continuing slide to new lows against the euro.
At the pump, meanwhile, gas prices extended their own advance toward record levels. The national average price of a gallon of gas rose 0.7 cent overnight to $3.185, according to AAA and the Oil Price Information Service. Gas prices are following oil higher, and are expected to peak this spring well above last May's record of $3.227 a gallon.
Thursday brought a mixed slate of economic news. Although reports on same-store sales suggested some retailers are doing better than expected and the number of people filing for unemployment claims dropped last week, home foreclosures jumped in the fourth quarter to an all-time high, according to The Mortgage Bankers Association.
The European Central Bank and Bank of England, meanwhile, decided to leave interest rates unchanged.
The foreclosure data and European interest rate decisions helped push the dollar lower. Analysts believe the steadily weakening dollar is the reason oil prices have jumped to a number of new inflation-adjusted record highs this week. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is falling.
"This market continues to be based on the dollar," said James Cordier, founder of OptionSellers.com, a Tampa, Fla., trading firm.
Light, sweet crude for April delivery rose 95 cents to settle at a record $105.47 a barrel on the New York Mercantile Exchange, after earlier spiking to a new trading record of $105.97. However, prices alternated between gains and losses frequently Thursday as some investors sold to lock in profits from a rally that added 6 percent to crude's price in two days.
Helping push oil prices higher Thursday was an overnight rebel attack on a Colombian oil pipeline that transports 60,000 barrels of oil a day for export markets.
"The attack was in response to the Colombian military's killing of a high ranking member of the rebel group ... during a raid into Ecuador," said Addison Armstrong, director of exchange Traded Markets at TFS Energy Futures LLC in Stamford, Conn., in a research note. "The Transandino pipeline may be out of service for up to three days following the explosion."
The attack came as traders worried about escalating tensions between Colombia and Venezuela over Colombia's raid into Ecuador. Venezuela moved tanks and soldiers to the Colombian border. Ecuador said Monday it had sent 3,200 soldiers to its border with Colombia.
In other Nymex trading, April heating oil futures rose 3.02 cents to settle at a record $2.9733 a gallon, while April gasoline futures rose 1.11 cents to settle at $2.6532 a gallon.
April natural gas futures inched up 0.1 cent to settle at $9.742 per 1,000 cubic feet. The Energy Department said inventories fell by 135 billion cubic feet last week, less than analysts had expected.
In London, Brent crude rose 97 cents to settle at $102.61 a barrel on the ICE Futures exchange.
Diesel prices jumped 1.4 cents overnight to a new record national average of $3.71 a gallon. High diesel prices are boosting prices of consumer goods, the vast majority of which are transported by the distillate fuel.
___
Associated Press writers Pablo Gorondi in Budapest and Gillian Wong in Singapore contributed to this report.
Loading comments…
JOHN WILEN | March 6, 2008 03:56 PM EST |
Compare other versions »Compare and versions