More bad news. M
Oil reaches $142 on view dollar will keep falling
By JOHN WILEN, AP Business Writer
Oil reaches $142 on view dollar will keep falling - Yahoo! News
Oil futures climbed briefly to a new record above $142 a barrel Friday on expectations that the weakening dollar, a major factor in crude's stratospheric climb, will keep falling and raising oil's appeal.
Retail gas prices inched lower overnight, but are likely to resume their own trek into record territory now that oil futures have broken out of the trading range where they had been for nearly 3 weeks.
Light, sweet crude for August delivery rose as high as $142.26 a barrel in premarket electronic trading on the New York Mercantile Exchange before pulling back to trade up 45 cents at $140.09. On Thursday, the contract shot past $140 and rose more than $5 to a new settlement record.
Oil rose Thursday in part on comments by OPEC officials; the organization's president predicted prices will rise further, and a top Libyan oil official suggested his nation may cut production.
Meanwhile, traders were coming around to the belief that the dollar, whose long decline has contributed greatly to oil's stratospheric rise this year, will continue to weaken. The market now expects that the Federal Reserve is unlikely to raise interest rates until much later than many analysts have forecast; since higher rates tend to strengthen the dollar, traders are anticipating that it will continue to fall and, consequently, that investors will turn to commodities including oil as a hedge against inflation.
On Friday, the dollar was slightly higher against the euro, with a euro buying $1.5744.
At the pump, meanwhile, gas prices slipped 0.1 cent overnight to a national average of $4.066 a gallon, according to a survey of stations by AAA, the Oil Price Information Service and Wright Express. Gas prices have fallen slightly from their June 16 record of $4.08 a gallon, but will likely resume their record breaking rise if oil futures keep trending higher.
In other Nymex trading Friday, July gasoline futures rose 0.35 cent to $3.5148 a gallon, and July heating oil futures rose 3.61 cents to $3.9195 a gallon. August natural gas futures rose 7.4 cents to $13.322 per 1,000 cubic feet.
In London, Brent crude futures rose 68 cents to $140.51 a barrel on the ICE Futures exchange.