LONDON: Oil prices charted fresh record territory Friday, rising to $103.05 as the dollar fell to all time lows, before profit-taking trimmed the gains, traders said.
At the same time gold led other commodities higher too, hitting a record $976.32 per ounce as the troubled, cheaper dollar encouraged buyers.
This was part of a broad-based commodities run based on the continued weakness of the dollar, said Petromatrix analyst Olivier Jakob.
A weak US currency boosts demand for dollar-denominated raw materials such as crude oil because it makes them cheaper for buyers using stronger currencies. The increased demand, if it outstrips the fall in the currency, leads to higher prices.
After striking a record high, New York s main contract, light sweet crude for delivery in April, stood at $102.07 per barrel, down 52 cents from Thursday s close.
Brent North Sea crude for April was at $100.40, down 50 cents. It struck a record peak of $101.27 on Thursday.
There is good support to oil futures with the weak dollar, geopolitical tensions, fund interest and OPEC s (stance on) … supplies, said Sucden analyst Andrey Kryuchenkov.
Nevertheless, persistent economic fears and more risk aversion could trigger a correction … as investors still fear that slower growth in the US could weigh on global growth estimates and dent demand for energy, he added.
OPEC, which pumps 40 percent of the world s oil, was unlikely to change its production level at a meeting next week should crude prices remain around $100, acting Libyan Oil Minister Chukri Ghanem told AFP on Friday.
Ghanem said of Wednesday s OPEC meeting: I think we won t do anything.
Ghanem, who is the head of the Libyan national oil company and is acting as oil minister, also told AFP by telephone that he expected the price to remain at about $100.
The Organization of Petroleum Exporting Countries, comprising 13 countries including Libya, was to meet in Vienna to reconsider its production ceiling of 29.67 million barrels per day, excluding output by Iraq. Key OPEC members Iran and Venezuela have called for the cartel to cut output ahead of an expected drop in demand during the second quarter with the end of the northern hemisphere winter.
According to analysts, their support for a cut has contributed heavily to oil s rise to record heights this week. -AFP
