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The Guardian: Oil price closes above $98 mark

Andrew Clark 
Wednesday November 21 2007

The price of oil closed above $98 a barrel for the first time yesterday as concerns about tight supply, winter demand and global political instability gripped the commodities market.

On New York’s Nymex energy exchange, the cost of a barrel of oil equalled its intraday record of $98.69 before ending the day up $3.39 at $98.03, pushing up against the $100-a-barrel level which it came close to breaching two weeks ago.

The spike was partly a result of a slump in the value of the dollar, which fell to a record low against the euro.

A weak dollar encourages speculators to snap up oil because the commodity is priced globally in the US currency.

Traders were also unsettled by a fire at a Shell facility on the Canadian oil sands in Alberta which prompted concern about a shortfall in supply to the US.

At the weekend Opec declined to increase supply to the global market.

Mahmoud Ahmadinejad, Iran’s president, floated the prospect of switching from the dollar into another currency on the grounds that the greenback was becoming “a worthless piece of paper”.

In London, the cost of Brent crude jumped $3.21 to $95.49.

http://www.guardian.co.uk/business/2007/nov/21/oil1

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