Gas Week

EWN Publishing

November oil delivery at $US83.17 a barrel: sliding US dollar draws investors to commodities as alternative investments

Posted by gasweek on 10 October, 2007

Crude oil traded near $US83 a barrel, after rising the most in four months as the sliding US dollar drew investors to commodities as alternative investments. “There are investors moving into physical assets to try and protect themselves against the weakening dollar,” said Tom Hartmann, commodity broker at Altavest Worldwide Trading. “Heating oil supplies may start to become a concern, especially with the low utilisation rates [reported by refiners],” reported The Australian Financial Review, 29/9/2007, p. 47

Highest since futures started in 1983 Crude oil for November delivery was at $US83.17 a barrel, up US29¢, in after-hours electronic trading on Friday on the New York Mercantile Exchange in Singapore. The October contract touched $US83.90 on September 20, the highest since futures were introduced in 1983.

US dollar steady fall:The US currency has tumbled since the Federal Reserve lowered the overnight lending rate between banks 0.5 percentage point to 4.75 per cent on September 18, the first reduction in four years. “When you have a central bank A lower US dollar makes oil cheaper in countries using other currencies. In US dollars, West Texas Intermediate, the New York- traded crude oil benchmark, is up 36 per cent this year. Oil is up 27 per cent in euros, 32 per cent in British pounds and 32 per cent in yen.

The Australian Financial Review, 29/9/2007, p. 47

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