Oil hits tops $140 as Fed decision sinks dollar
OPEC president sees prices as high as $170 this summer; natural gas rallies

Myra P. Saefong & Polya Lesova
Market Watch
Thursday, June 26, 2008

SAN FRANCISCO (MarketWatch) -- Crude-oil futures climbed to unprecedented levels Thursday, as weakness in the U.S. dollar, influenced by the U.S. Federal Reserve's decision to stand pat on interest rates, sent prices to a peak above $140 a barrel.

Comments from OPEC's president warning of higher oil prices because of the dollar's decline as well as reports that Libya threatened to cut crude output, helped bolster energy prices.

Crude oil for August delivery reached a high of $140.39 a barrel in electronic trading on Globex as of 3 p.m. Eastern.

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The contract closed at a record $139.64 on the New York Mercantile Exchange, up $5.09, or 3.8%, for the session after trading as high as $140.

The Fed is driving weakness in the dollar and that's driving oil prices higher, said Kevin Kerr, president of Kerr Trading International.
"$150 is now very likely," said Kerr, who's also editor of MarketWatch's Global Resources Trader.

"Crude oil is unlikely to face a major correction without a major bottom in the dollar or large cut in global demand," said Thomas Hartmann, an analyst at Altavest Worldwide Trading. "Inflation appears on track to get 'out of control' before the situation improves."

Full article here.

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