Oil Surges to New High

Crude futures climb to $119.74 a barrel during trading Tuesday in New York, on a weak dollar and geopolitical threats.

Author:
Publish date:: Apr 22, 2008 3:04 PM EDT

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
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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)

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) - Get Report

advanced 0.56% to $84.81a share.

Chevron

(CVX) - Get Report

gained 1% to $93.63, and

Hess