Oil finishes at all-time high above $89 - Oct. 18, 2007
Oil finishes at all-time high above $89 - Oct. 18, 2007
Quote:
NEW YORK (CNNMoney.com) -- Oil prices finished at an all-time high above $89 a barrel Thursday, while the cost of a gallon of gasoline jerked higher.
Light, sweet crude for the November contract jumped $2.07 to settle at $89.47 a barrel on the New York Mercantile Exchange, shattering the previous record of $87.61 a barrel reached two days earlier.
In after-hours electronic trading light, sweet crude for November delivery went even higher, hitting $90.02 a barrel, according to the Associated Press.
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Prices at the pump have been slow to respond to rising crude prices recently, but that may be changing. On Thursday, gas prices gained nearly 2 cents to a national average of $2.79 a gallon for regular-grade gasoline, according to AAA. They are up 4 cents since Monday.
"There's almost an inevitability here now that we are going to get to $100 a barrel," said John Kilduff, an energy analyst at Man Financial in New York.
Helping to lift crude prices higher was a decline in the dollar, which fell to an all-time low versus the euro and also dipped versus the yen.
Since oil is priced in dollars, a declining greenback makes oil less expensive for consumers outside the United States, encouraging more consumption.
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This is happening much faster than I had expected. Passing the $90 mark is a milestone paving the way to $100 oil. Chances are that the price will decline again, but the road signs all point to the century mark of oil cost within the next few months. Boone Pickens, a very prominent energy investor, was recently interviewed on CNN and predicted $100 oil within less than a year and possibly much sooner. He has made billions on his oil investments.
Pickens warned that declining oil production could be exacerbated by producing countries deciding to withold some or most of their crude from the market in anticipation of rising prices and increased domestic demand. If this became a significant factor, it could set off serious shortages in importing countries - such as the U.S.
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