John

Oil Breaks the $100 Barrier.

In News on January 3, 2008 at 1:47 am

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(Pic from lusi @ stockxchng)

Yups. We’re all screwed. Start tanking up, people. Tonight. This breaking from the BBC:

Oil has traded at $100 a barrel for the first time.

Violence in Nigeria, Algeria and Pakistan, the weak US dollar and the threat of cold weather have all raised prices after the new year break.

Light sweet crude rose $4.02 to $100 a barrel in New York, prompting a drop in shares and a surge in gold prices.

There are concerns that the high price of oil will stoke inflation at a time when many central banks are trying to cut interest rates to stimulate growth.

But some analysts played down the relevance of passing the $100 mark.

“The entire focus on $100 oil is frivolous,” said Tim Evans at Citigroup Futures Research in New York.

“It is not a magic number. It doesn’t suddenly make this a fundamentally strong market.”

Trading volumes were about half of their usual levels as traders returned from their new year breaks, which may have exaggerated the effect of speculative transactions, analysts said.

“I would imagine the speculators are the biggest drivers today,” said Phil Flynn from Alaron Trading in Chicago.

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