September 29 2007
LONDON: Oil rose above US$83 (US$1 = RM3.42) a barrel yesterday and closed in on an all-time high as fund buying, spurred by a weak dollar, provided support.
US crude climbed 39 cents to US$83.27 by 1247 GMT, after gaining US$2.58, or 3.24 per cent, in the previous session.
Oil was recovering from a profit-taking dip earlier this week that knocked prices from a peak of US$83.90 hit on September 20.
London Brent crude surged to a record high of US$80.54, up 51 cents.
"The ever-weakening US dollar is probably the key driver of this, with non-commercial long interest being fuelled by the view that the US will sacrifice its currency to prop up growth," said a Citigroup research note.
The dollar hit an all-time low against a basket of currencies for the second consecutive day yesterday, pressured by worries about the health of the US economy and likelihood of more interest rate cuts.
"On a macro level people are clearly buying crude oil as a hedge against a weaker dollar. The crude market is structually very solid," said a hedge fund manager based in Asia.
The weak dollar, which can strengthen the nominal values of commodities traded in the currency, also boosted metals. - Reuters
http://www.btimes.com.my/Current_News/BT/Saturday/Corporate/oilbo.xml/Article/
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