Oil Hits New Intraday Record
West Texas crude futures topped $111-a-barrel Thursday on the New York Mercantile Exchange, a new record, but it later retraced its gains to end roughly flat for the day.
Oil for April delivery was 11 cents higher to $109.81 a barrel. Brent crude rose 66 cents to reach $106.93 a barrel. Reformulated gasoline fell 4 cents to $2.69 a gallon, and heating oil gained 3 cents to $3.06 a gallon.
The near-term natural gas contract advanced 14 cents to finish at $10.16 per million British thermal units.
An early advance for oil was sparked by a slide in the value of the U.S. dollar against the euro and the yen. The euro climbed to a record high of $1.5625 against the dollar before backing off to $1.5571. The dollar fell to its lowest value against the yen since 1995, touching the 99.75 yen level before settling at 100.73.With most commodities posting impressive returns in recent months, Investors are streaming into the commodity space to protect themselves from the depreciating greenback. Crude oil wasn't the only commodity to benefit from the declining dollar. Gold topped $1,000 an ounce for the first time before settling at $994 an ounce. The Dow Jones-AIG Commodity Index rose 0.5% to 218.18. The need to find safe havens for their investment funds appears so strong that investors are persistently ignoring bearish economic indicators that normally hurt commodity prices. New inventory figures released Wednesday by the Energy Information Administration showed that U.S. crude stocks rose three times more than what analysts were expecting. While these data would normally hurt crude prices, it has had little affect on this week's trading activity. The dollar has fallen 5.5% against a basket of six major world currencies since early January, according to Stephen Schork, principal at the Schork Group. Some economists perceive a weak dollar as beneficial to the economy because it makes U.S. goods more attractive to export. However, the price of crude oil rose from about $80 a barrel to nearly $110 over the same period. Schork points to the falling dollar as a major factor in oil's rise. "Whatever benefit the U.S. administration is trying to derive out of its weak-dollar policy via exports is being compromised by imported oil costs," Schork said. Meanwhile, energy stocks were mostly to the downside. ConocoPhillips (COP) dropped 0.8% to $77.33 a share. BP (BP) shares fell 1.3% to $65.04, and Exxon Mobil (XOM) edged 0.8% higher to $86.63.
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