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oil settles at record high above 100 dollars

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    Oil settles at record high above $100

    NEW YORK (AP) -- Oil futures surged back above $100 a barrel Tuesday, settling at a record high, as traders focused on supply concerns and stock market bulls rather than signs that the U.S. economy remains shaky.

    Light, sweet crude for April delivery jumped $1.65 to settle at $100.88 a barrel on the New York Mercantile Exchange. Monday prices closed at $99.23.

    Last week, March oil rallied to a settlement record of $100.74 and a trading record of $101.32 before the contract expired.

    Crossing the psychologically significant hurdle once again - oil prices last topped $100 last week - in itself may have helped fuel the rally by triggering computer programs set to buy at certain levels and enticing new speculators into the market, said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.

    "You see additional buying among people who think they're missing something," he said. "Any time you move above [$100 a barrel], you're going to ignite some fresh buying."

    Investors who recently were selling on weak economic data seemed to take in stride news from the Conference Board, a business-backed research group, that its Consumer Confidence Index fell to 75 this month from a revised 87.3 in January.

    The reading was the lowest since February 2003, and was far below what analysts had been expecting. It indicated that consumers might continue to curb their spending in the coming months.

    Meanwhile, the Labor Department reported that wholesale inflation jumped by 1% in January, more than twice what analysts had been forecasting. That report, coupled with the consumer confidence index, pointed to an economy that is slowing even as prices are rising.

    Oil stocks: There will be profits
    But traders in both the energy market and the stock market, which also advanced, seemed unfazed.

    Hedge funds looking to cover future positions and foreign buyers, who because of the weak dollar can still lock in prices at a relative bargain, may have helped accelerate the day's buying, said Adam Hewison, president of INO.com, a financial Web site that specializes in futures trading.

    "In euro terms, oil is not that expensive, and it's likely to go even higher," Hewison said.

    "We're seeing a solid tone to the stock market," Ritterbusch said. "I think the oil market is using the stock market as a proxy for future economic activity."

    Also supporting prices were concerns about supply disruptions from unrest in Iraq, a major oil exporter, and warnings by Iran against further international sanctions. Turkish ground forces pushed their offensive against Kurdish rebels deeper into the north of Iraq, seizing seven guerrilla camps, officials said.

    Oil has risen in recent days amid an increase in speculative buying, with some traders believing that global demand will be high enough to support higher crude prices even if the U.S. economy is slowing. That thesis will be put to the test Wednesday, when analysts expect the U.S. Energy Department's Energy Information Administration to report that the nation's crude stocks rose for the seventh week in a row.

    Save money on energy bills
    The government inventories report also is expected to show supplies of distillates, which include heating oil and diesel, fell by 2 million barrels last week, according to a Dow Jones Newswires poll of analysts.

    Cold weather across the Midwest and Northeast has also helped push heating oil prices higher.

    On Tuesday, heating oil futures fell a tenth of a cent to $2.816 a gallon, after earlier setting a new trading record of $2.8175 a gallon.

    Gasoline prices also held fairly steady at $2.55 a gallon. Gas prices at the pump rose to $3.142 from $3.137 Monday, according to AAA and the Oil Price Information Service.

    The EIA report is also expected to show that crude oil stocks rose last week by 2.6 million barrels, which would be the seventh straight week of gains. Gasoline inventories are expected to rise by 300,000 barrels.

    Natural gas futures fell 2 cents to $9.19 per 1,000 cubic feet. Earlier, Gazprom, Russia's natural gas monopoly, again threatened to cut supplies to neighboring Ukraine, according to Russian news agency reports.

    In London, Brent crude futures rose $1.79 to sell for $99.49 a barrel on the ICE Futures exchange.
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