oil hits all time high

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    after 28 years. A double top perhaps?


    Oil Prices Pass Record Set in ’80s, but Then Recede

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    Published: March 3, 2008

    Setting an all-time record, oil prices rose to nearly $104 a barrel on Monday morning, exceeding their inflation-adjusted high reached in the early 1980s during the second oil shock, before pulling back.
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    Oil futures rose as much as $2.11, to $103.95, on the New York Mercantile Exchange. That level tops the record set in April 1980 of $39.50 a barrel, which would translate to $103.76 a barrel in today’s money. Late in the day, oil gave up much of its gains and was trading at $102.43 a barrel, up 59 cents.

    The latest surge in oil prices is taking place as investors seek refuge in commodities to offset a slowing economy and declines in the dollar, as well as to hedge against inflation.

    The dollar fell to its lowest level in three years against the yen on Monday. It also dropped to a record $1.5274 in early New York trading against the euro following steep declines last week.

    Today’s record oil prices are markedly different from the energy crises of the 1970s and 1980s, which were brought about by sudden interruptions in oil supplies.

    Since the year 2000, oil prices have more than quadrupled as strong growth in demand from the United States and Asia outstripped the ability of oil producers to increase their output.

    Other energy futures also rallied on Monday. Heating oil futures jumped 6.06 cents to $2.8675 a gallon, while gasoline futures rose 5.65 cents to $2.7264 a gallon. Natural gas gained 20 cents to $9.566 per thousand cubic feet.

    In London, Brent crude futures rose $2.07 to $102.17 a barrel on the ICE Futures exchange.

    The OPEC oil cartel meets on Wednesday and is expected to leave its production levels unchanged. The oil producing group had suggested last month that it might curb production soon to make up for a seasonal decline in oil demand.

    But with oil prices at their current levels, analysts said members of the Organization of the Petroleum Exporting Countries will find it politically difficult to curb their output at this time.
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