Crude oil futures rose to another record on Monday on the falling dollar, a decreased chance for an OPEC output hike, and downbeat U.S. manufacturing and spending reports.
Oil hit$103.95 a barrel in early trading as the dollar reached historical lows against other major currencies. Investments in commodities are made to compensate for inflation when the dollar falls.
Raising concerns about the health of the economy, manufacturing in the U.S. fell in February. The Institute for Supply Management's factory index dropped to 48.3 for the month compared to a 50.7 reading in January, the institute said. Also, U.S. construction spending dropped 1.7 percent during January, the Commerce Department reported today.
Meanwhile, the Organization of Petroleum Exporting Countries will meet on Wednesday to discuss about production but is not likely to increase it.
I don't think OPEC would consider increasing production because then we would be increasing to meet demand that doesn't exist, said OPEC President Chakib Khelil according to Reuters.
Crude oil prices rose 0.61 cents or 60 percent to $102.45 a barrel on the New York Mercantile Exchange at 5:14 p.m.
Contributing to oil prices, tension in Middle East, South America and Nigeria are raising worries about supply disruption. In South America two OPEC countries, Venezuela and Ecuador, sent troops to their borders with Colombia after Colombia bombed rebels in Ecuador. Venezuela is the number four crude exporting country to the U.S.
In Nigeria, supply fears grew after attackers blew up a police houseboat and an oil and gas export hub in southern Niger Delta. Nigeria is top oil producer of Africa.
Brent crude rose 0.69 cents or 69 percent to $100.85 a barrel on the ICE Futures Exchange of London.