Oil passes, settles above $145 for first time
There was little good news for Americans hitting the road for the July Fourth holiday, as gas prices set their own record near $4.10 a gallon.
Light, sweet crude for August delivery surged $1.72 to settle at a record $145.29 on the New York Mercantile Exchange. Earlier in the trading session, the last of the week, the contract rose to $145.85 a barrel, also a new high.
The gains built on a record-shattering rally the previous day, and left prices 3.6 percent higher for the week. Crude has shot up by more than half just since the start of the year.
Oil has set trading or closing records in each of the last six trading sessions.
U.S. gas prices resumed their march higher as motorists looked ahead to the three-day break. The average retail price for regular gasoline jumped six-tenths of a penny to $4.098 a gallon, according to AAA, the Oil Prices Information Service and Wright Express.
Thursday's surge in oil was propelled by a report of lower crude stockpiles in the United States, lingering concerns about conflict with Iran and comments by Saudi Arabia's oil minister suggesting his country would not boost production.
"The strength in crude oil is amazing given the price of the euro," said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com.
A slumping dollar has been a key driver pushing oil prices up by half this year. Many investors buy commodities such as oil as a hedge against inflation when the greenback weakens, and a falling dollar makes oil less expensive to investors overseas. When the dollar strengthens, traders have less incentive to buy commodities.
Oil prices are also rising because investors have been pumping more money into the commodity to compensate for what are perceived to be anemic returns elsewhere, analysts say. The major stock market indexes are all down by double digits since the start of the year.
At the same time, recent saber-rattling in the Middle East has left the markets jittery. And many traders are concerned that there simply is not enough oil in the short term to quench rising global demand — even without a conflict that could disrupt supplies.
You can be the first to comment on this story.