Oil Surges to New High

Crude oil futures closed at an all-time high of $119.37 a barrel Tuesday as the U.S. dollar declined further against major international currencies and geopolitical threats pressured global oil supplies.

West Texas crude for May reached an intraday high of $119.90 a barrel on the New York Mercantile Exchange, also a record. Brent Crude for June delivery gained $1.42 to $114.43 a barrel. Reformulated gasoline edged 3 cents higher to $3.01 a gallon, and heating oil fell fractionally to $3.32 a gallon.

Near-term natural gas slid 16 cents to $10.73 per million British thermal units.

The shrinking value of the U.S. dollar sent oil prices soaring Tuesday. The dollar hit a new all-time low of $1.599 vs. the euro, and the U.S. Dollar Index, which measures the value of the dollar against a basket of international currencies, fell -0.46% to 71.33.

Cramer: Speculation Not Fueling Oil

The price of oil tends to rise when the value of the dollar falls, because oil is denominated in U.S. dollars in international markets.

Also supporting crude prices Tuesday was a bevy of geopolitical developments. Royal Dutch Shell(RDS.A Quote - Cramer on RDS.A - Stock Picks) declared force majeure, or suspended agreements with buyers, on 169,000 barrels a day of throughput from its Bonny terminal in the Niger Delta after rebels sabotaged a number of oil pipelines there. Throughput from the Bonny terminal will be shut-in at least through the end of May.

According to Dennis Gartman, publisher of The Gartman Letter, the U.S. economy has a large exposure to the current events in Nigeria because the country is the third-largest source of oil imports into the U.S.

Elsewhere, two oil refineries in Great Britain have shut down temporarily, affecting at least 200,000 barrels a day of production.

Meanwhile, integrated energy stocks were mostly higher in the trading session. ConocoPhillips (COP Quote - Cramer on COP - Stock Picks) advanced 0.56% to $84.81a share. Chevron(CVX Quote - Cramer on CVX - Stock Picks) gained 1% to $93.63, and Hess(HES Quote - Cramer on HES - Stock Picks) climbed 2.93% to $115.86.

However, oil service stocks finished the session mostly lower. Shares of Baker Hughes(BHI Quote - Cramer on BHI - Stock Picks) fell 1.45% to $80.63. National Oilwell Varco(NOV Quote - Cramer on NOV - Stock Picks) slid 1.46% to $74.50 and Transocean(RIG Quote - Cramer on RIG - Stock Picks) dropped 1.94% to $156.59 a share.