Once again crude oil records an all time high of $119.93 per barrel yesterday as a strike at a North Sea closed a pipeline system which normally delivers 700,000 barrels of crude to refineries in the UK. Adding to supply concerns the militant attack in Nigeria caused a pipeline to be hit while reducing production. Also in Nigeria, workers at an Exxon Mobil slowed their production by an unknown amount to demand more pay. The tensions in Nigeria caused the countries output to decline and now they can only produce about 75 percent of their total capacity. The contract gained $0.23 while closing at $118.75 as it records a low of $118.16 per barrel.
As the US dollar stabilizes out against major currencies due to predictions that the Feds will finally stop cutting their rates, crude prices slightly decline as investors start locking in on profits. While crude prices are currently dipping, consumers' fears start to ease as they feel that prices are finally stabilizing. The market today opened at $118.84 while recording a high of $118.84 per barrel and a low of $118.25 per barrel.
Investors now are focusing and waiting for the Fed's decision of cutting or leaving interest rates as this will usually weaken the US dollar if the rate is cut. If interest rates are cut, oil prices will soar while the crude market welcomes new investors as it is known to be a hedge against inflation and the falling greenback as it also becomes cheaper for foreign investors as they hold a stronger currency. But, if the interest rates are left unchanged, crude prices will decline as investors gain more confidence in the dollar.