Crude oil prices spiked to record a new all time high of $120.36 per barrel. This is due to concerns about price increase in gasoline and goods and services throughout the globe. Adding to that, Nigeria cut down on their production as the rebels attacked an oil-facility transfer, continuing to affect supply. In addition to Nigeria, the tensions in Iraq helped in the rally of prices. Crude contract gained $3.65 closing at $119.97 while recording a low of $116.05 per barrel.
As the greenback extends its losses, crude oil prices continued its gains as a result to investors being attracted to the crude oil market as a hedge against inflation and the weaker dollar; especially as the dollar's comeback still needs more confirmation based on solid fundamentals and economic performance.
Filling the market are also anticipations of demand rising as the summer driving season is just around the corner and ahead of Beijing Olympic Games. Chinese refiners are stocking up crude ahead of the games to avoid fuel shortages, and that will increase demand before the games, as China is accounted for a third of last year's growth of crude demand and will continue to offset the drawback in US consumption. Today the crude oil market opened at $119.90 while recording a low of $119.61 per barrel and a high of $120.23 per barrel so far.
Supply and demand woes still have their affect in the market as prices continue to jump. Investors are calm about the incline that we are witnessing in the market while consumers are worried that this is only adding to inflationary pressures and evaporating their disposable income as they struggle to maintain their living standards.