Crude prices continue to soar as commodities are known to be safe havens against the greenback. As the dollar continues to plunge due to the future expected rate cut by the feds of 75 basis points, investors turn to stable investments like oil. With all the funds pumped in the oil market, it's leading prices higher than ever witnessed in history. Also a reason for the great incline in crude prices is that at OPEC's last meeting it was decided that they were going to maintain their production on hold. Yesterday, crude contract gained $2.75 closing at $107.90 per barrel reaching a low of $104.08 per barrel and a high of $108.21 per barrel.
Today, the global stock market is steady recording losses as crude prices continue to surge. The US is the most country that should be pitied since the increase in oil prices is affecting it as they heavily depend on the imported oil. Already the US did not need any more worries keeping in mind that they are in recession and the economy is not assured. The weakening dollar is prompting demand for dollar backed commodities like oil since it is cheaper for traders using other major currencies. Currently the market opened at $107.91 per barrel reaching a low of $107.57 per barrel and a high of $108.05 per barrel.
Rallying commodities is not always good for investors but also have a upside risk, like inflationary concerns which may keep the Feds from cutting interest rates by as much as investors expected. Speculative investing and the declining greenback is some of the main reasons supporting the rise in crude prices. Dollar backed commodities will continue to head towards the upside as long as the Feds keep planning to slash interest rates.