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Oil jumps above $140 on OPEC, Libya comments

(Agencies)
Updated: 2008-06-27 09:09

 

Oil's record surge came late in the day on no new news, analysts said, suggesting late-session position squaring by investors.

"A lot of volume comes in the last 45 minutes (of trading)," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.

Oil futures were also rising as investors reassessed comments the Federal Reserve made Wednesday when it held a key interest rate unchanged. Many investors who had expected the Fed to raise interest rates in August now think a rate hike is unlikely until after the November election or next year, said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com.

Related readings:  OPEC head says no shortage in oil market  'Economic meltdown' if crude oil hits $200  Is the oil bubble ready to burst?  Saudi king says to increase oil output

"Right now, the market's viewing the Fed as powerless," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.

Interest rates affect the dollar; many analysts believe the Fed's rate cutting campaign, which began last September, had much to do with weakening the dollar against the euro and sending oil prices skyrocketing. The dollar slid against the euro after the Fed's comments Wednesday, and was down again on Thursday.

In other Nymex trading Thursday, July gasoline futures rose 11.72 cents to settle at $3.5113 a gallon and July heating oil futures rose 13.42 cents to settle at $3.8834 a gallon. The expiring July natural gas futures rose 35.2 cents to settle at $13.105 per 1,000 cubic feet. Trading in expiring contracts is often volatile.

In London, August Brent crude futures rose $5.50 to settle at $139.83 on the ICE Futures Exchange.

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