Oil prices close to record high 110 dollars

Oil prices were again close to record levels of almost 110 dollars on Wednesday, supported by a weak dollar and ever-tightening energy supplies, analysts said.New York's main oil contract, light sweet crude for delivery in April, rose 16 cents to 108.91 dollars per barrel, after striking an historic high of 109.72 dollars on Tuesday.Brent North Sea crude for April edged 11 cents higher to 105.36 dollars. The contract had struck a record peak of 105.82 on Tuesday."Crude futures were a little higher (on Wednesday), holding firm after robust gains ... and ahead of the key weekly report on US (energy) inventories," said Sucden analyst Andrey Kryuchenkov.A surprise drop in US crude inventories helped spark a record-breaking run last week.This week, oil prices have ventured further into record territory, with New York crude climbing past 107, 108 and 109 dollars and with the symbolic 110 now within grasp.Investors have pumped cash into commodities amid resurgent jitters about rising global inflation and a potential US recession, and with the dollar plunging to a series of record lows against the euro.The dollar plunged Wednesday to fresh record lows, with the euro topping the 1.55 dollars level for the first time in its history.In mid-afternoon London trade, the euro soared as high as 1.5503 dollars before easing slightly to stand at 1.5489."The oil market is really soaring to unprecedented heights primarily due to funds and the speculators putting money into oil and other commodities," said Victor Shum, an analyst with Purvin and Gertz energy consultancy in Singapore."Money always looks for better returns," he said, adding investors who are flush with cash see commodities offering "a hedge against the weakening dollar and inflation."In recent weeks and days, prices have also been driven by keen demand from the United States, as well as Asian economic giants China and India.Prices garnered further support from OPEC's decision last week to maintain current output levels.The price of oil produced by OPEC countries has topped the 100-dollar-per-barrel mark for the first time, the cartel said in Vienna.OPEC's daily basket price, which is always published with a 24-hour delay and serves as the reference price for the Organisation of Petroleum Exporting Countries, rose to 100.57 dollars on Tuesday from 99.48 dollars the previous day, the cartel said in a statement.The basket comprises 13 different crudes from the countries in the organisation, which produces about 40 percent of global oil supplies.The OPEC price is tied to benchmark prices for light sweet crude oil, the highest quality crude, which are set on the main exchanges in London and New York.
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As in the days of Noah....