Investors rush for commodities as oil hits $100

Updated: 2008-01-03 23:42

LONDON -- Investors poured money into commodities on Wednesday amid deepening fears about the weakness of the US dollar, as the crude oil prices briefly hit the 100 US-dollar-a-barrel mark and gold prices jumped to an all-time high.

The 100 US-dollar-a-barrel level was reached as the result of a single trade by two independent traders -- known as locals -- at the Nymex floor, industry sources said.

Related readings:
 German expert says oil prices likely to double in 10 years
 Crude oil prices to continue surging
 Oil prices ease after hitting $100
 Bush not to tap oil reserves to drive down prices

 Shanghai's back-up oil facility to be ready by 2009

Before the trade, oil prices were at 99.53 dollars a barrel. In spite of the controversy about the single trade, crude oil closed up 3.64 dollars at 99.62 dollars a barrel in New York.

The dollar fell to 1.4750 dollars against the euro and the sterling went down to one pound against 1.97345, or 0.40 percent lower against the dollar by 11 am Greenwich mean time, after weaker than expected purchasing managers' data suggested the UK economy may also be facing a more severe slowdown than thought.

Spot bullion prices in London hit a record 861.10 dollars an ounce, above the previous peak of 850 dollars an ounce reached in January 1980.

Gold was boosted by political tensions in Pakistan and the search by investors for hedges against inflation and further dollar weakness, according to a Financial Times report.

People seem scared from a number of factors -- an inflation spike, further US dollar weakness or systemic financial risk, a former UBS metal strategist said.

Crude oil prices were also boosted by, among other reasons, the renewed tension in Nigeria, Africa's biggest oil producer.

   1 2   

Top World News  
Today's Top News  
Most Commented/Read Stories in 48 Hours