OIL UP AND OUT OF PREVIOUS RANGE; NEW RECORD HIGH
June 27th, 2008Dollar tanking again.
Via: Reuters / Guardian:
Oil cracked the $140 record high that market bulls had been eyeing for weeks, and grains and metals rallied as well, as supply issues and inflation from a weak dollar dominated commodity markets on Thursday.
The Reuters-Jefferies CRB Index, one of the broadest indicators of commodities demand, rose more than 2 percent to a record of 463.41 points as even orange juice — a normally tepid market — rallied.
While the jump in oil was over worries that producer Libya may cut back on exports even as consumer nations were crying for more supply, markets like gold and copper were driven by the dollar’s fall after the U.S. Federal Reserve decided to keep interest rates flat despite higher inflation.
The dollar had run up against other major currencies earlier this month on expectations of an imminent U.S. rate hike. On Thursday, it stood at a near three-week low against the euro.
“The Fed’s in a difficult spot. They’re kind of damned if they do and damned if they don’t,” said Michael Gross, a futures analyst at Florida’s Optionsellers.com, referring to the Fed dilemma on rates as inflation climbed.
“For that reason, I think commodities are taking the ball and running with it.”
