That’s what everyone is wondering about oil prices, which just keep going up:
BANGKOK, Thailand (AP) — Oil prices hit a new record high above $125 Friday as a weaker U.S. dollar drove investments into commodities.
U.S. crude for June delivery rose as high as $125.12 a barrel in electronic trading on the New York Mercantile Exchange at midday before $124.94 in Europe. On Thursday, the contract rose to a record close of $123.69 a barrel.
In London, Brent crude contracts also hit record highs before slipping and traded up $1.13 on the day at $123.97 a barrel on the ICE Futures exchange. Earlier Friday, Brent had reached $124.25 before falling back.
Comments Thursday from European Central Bank president Jean-Claude Trichet signaling that the bank was unlikely to consider interest rate cuts helped strengthen the euro against the U.S. currency.
By midday in Europe, the euro stood at $1.5466 compared to $1.5404 in late trading Thursday night in New York. The dollar was also weaker Friday against the British pound and the Japanese yen.
Investors view commodities such as oil as a hedge against inflation, and some analysts think the dollar’s protracted decline is the main reason behind oil prices doubling from a year ago. Also, a weaker dollar makes oil cheaper to investors overseas.
This is the side of the oil and gas “crisis” that no politician is talking about right now — the dollar crisis. One of the biggest reasons that oil prices have skyrocketed over the past two years, and gas prices have gone up with them, is because the U.S. Dollars has lost significant value against other world currencies.
Here’s how it’s performed against the Euro over the past five years:
Any questions ?
