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Oil price hits $82 in late Wednesday trading, weak dollar
Published on October 22, 2009 by oilprices · No CommentsOil prices hit new highs for the year in trading on Wednesday as the US dollar fell to new lows against the Euro, showing how much the weak US currency has come to dominate energy markets.
Benchmark crude oil futures for December delivery rose $2.25 to settle at $81.37 a barrel on the NYMEX. Oil prices hit $82 a barrel in trading at one point.
The run up in crude oil prices came within minutes of a government report showing that crude oil supplies in the United States are growing and that refiners are producing little gasoline because consumers are not using as much.
“The dollar obviously is the overriding factor,” PFGBest analyst Phil Flynn said. “It’s not about demand, I can tell you that.”
Oil is traded in US dollars, so the drop in their value means it takes more of them to buy a barrel of oil. Refiners are shutting down plants, a combination of little demand and rising crude prices that wipe out profit margins. There are concerns that spiking energy prices could stunt any economic recovery in Europe and the United States. Energy Secretary Steven Chu said Tuesday that crude oil prices at $80 per barrel right now are worrisome.