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Oil Prices Return to $100
Territory After
spending only three days under $100 a barrel, oil prices shot back up on
Thursday morning, erasing most of a $10-a-barrel decline in just two
days.
Crude oil
futures traded above $100 shortly after the open, before falling back
slightly to $99.75. The rise follows a large jump on Wednesday when oil
gained 6.6 percent as panicky investors fled the stock market to seek
shelter in the perceived safety of commodities.
After six
months in the triple-digits, oil prices had slumped earlier in the week
because of concerns that the financial turmoil on Wall Street would slow
economic growth and hurt oil demand. Prices, which had fallen to $91.51
a barrel on Tuesday, have since made up their losses.
Also,
five days after
Hurricane Ike
came ashore, the extent of the damage to the nation’s energy hub along
the Gulf Coast remains unclear. The Gulf of Mexico’s entire oil and
natural gas production remains shut while a dozen refineries across
Texas and Louisiana are trying to resume production. It could take weeks
before the situation returns to normal.
The energy
secretary, Samuel W. Bodman III, said Wednesday that the government was
considering appealing to the International Energy Agency to release
emergency fuel supplies to make up for the short-term disruptions.
The
energy agency, whose role is to coordinate energy policies for 27
industrialized nations, last released emergency oil stocks in the wake
of
hurricanes
Katrina and Rita in 2005.
The energy
department on Wednesday said that crude oil inventories in the United
States had fallen to their lowest level since May. Gasoline stockpiles
are at their lowest since 1969.
The price
of oil also rose as the dollar weakened. Over the last year, investors
have used commodities, and oil, as a natural hedge against a falling
dollar. The dollar slid as much as 2.6 percent to $1.4541 against the
euro.
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