Monday, June 16, 2008

Crude Oil Rises to Record $139.89 as Dollar Drops

Crude Oil Rises to Record $139.89 as Dollar Drops Against Euro

By Mark Shenk

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Crude oil rose to a record $139.89 a barrel in New York as a weaker dollar bolstered the appeal of commodities as a hedge, and a fire cut North Sea output.

The U.S. currency fell as much as 0.8 percent against the euro, making commodity purchases cheaper to foreign investors. StatoilHydro ASA's 150,000 barrel-a-day Oseberg oil and gas field off the Norwegian coast was shut after a fire broke out in a high-voltage room on a platform yesterday.

‘‘When there is any sign of dollar weakness, the money runs to safe harbors such as oil,'' said Rick Mueller, director of oil practice at Energy Security Analysis Inc. in Wakefield, Massachusetts. ‘‘The fire at Oseberg, which is a very important field, is getting an outsized reaction because the market is so nervous.''

Crude oil for July delivery rose $4.10, or 3 percent, to $138.96 a barrel at 9:06 a.m. on the New York Mercantile Exchange. Futures reached the previous record of $139.12 a barrel on June 6.

Brent crude oil for August settlement climbed $3.40, or 2.5 percent, to $138.51 a barrel on London's ICE Futures Europe exchange. Prices climbed to a record $139.32 today.

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