BP Plc and ConocoPhillips evacuated oilrig workers, adding to supply concerns before a U.S. Energy Department report that may show inventories fell for a third week. The dollar slumped, pushing up prices of commodities denominated in the currency, on expectations the U.S. Federal Reserve may cut interest rates.
``One-hundred-dollar oil is the big benchmark and the factors driving crude towards that are in force,'' said Dariusz Kowalczyk, chief investment strategist at CFC Seymour Ltd. in Hong Kong. ``The supply disruption in the North Sea has given further impetus'' to prices.
Crude oil for December delivery gained as much as $1.33, or 1.4 percent, to $98.03 a barrel in after-hours electronic trading on the New York Mercantile Exchange, the highest since trading began in 1983. It was at $97.76 at 3:05 p.m. in Singapore. Futures have climbed 66 percent in the past year.
Yesterday, oil rose $2.72, or 2.9 percent, to settle at $96.70 a barrel, a record close.
Oil for March 2008 delivery was at $94.90 a barrel and the contract for December 2008 was at $87.97.
Weaker Dollar
Oil has risen 60 percent in U.S. dollars this year compared with 44 percent in euros, 53 percent in yen and 50 percent in British pounds.
``The weakness in the dollar is giving investors the chance to buy oil at a cheaper price,'' said Tetsu Emori, a fund manager at Astmax Futures Ltd. in Tokyo. ``Any further declines will only push oil higher.''
Workers on ConocoPhillips's Ekofisk A, B and C platforms, as well as Eldfisk A and B, were being moved to land or to safer North Sea sites yesterday, said Kurt Mikkelsen, a ConocoPhillips spokesman. BP is moving 150 workers from its Valhall field and expects the platform's 80,000 barrel-a-day oil and gas output to come to a halt late today, spokesman Jan Erik Geirmo said.
The dollar has fallen 9.8 percent against the euro this year, to the lowest since the 13-nation currency came into use in January 1999, on speculation interest rate cuts by the U.S. Federal Reserve will prompt investors to buy higher-yielding currencies.
The dollar's decline increased the attractiveness of commodities as alternative investments. A weaker dollar reduced the costs for buyers paying in other currencies.
Gold reached a 27-year high and silver rose to the most in 26 years as rising oil prices and a slumping dollar deepened concern that inflation will accelerate. Wheat, corn, soybeans and palm oil also gained. Palm oil, used in biofuels, jumped to its highest, gaining 1.6 percent to 3,007 ringgit ($902) a ton.
Smaller Cars
Indonesian Economy Minister Boediono said high oil prices are a concern for the country as they drive up production prices.
The surging cost of oil may prompt carmakers to increase sales of compact models, said Honda Motor President Masaaki Kato.
``We need to achieve improved fuel efficiency,'' he said. ``If we make continued, long-term improvements in efficiency we address both. We're making efforts to grow out of the dependence on fossil fuels.''
Climbing fuel prices may lead to higher airfares, said Japan Airlines Corp. Managing Director Tetsuya Takenaka.
``We need to think about raising fares next fiscal year if oil prices remain at high levels,'' Takenaka said.
Oil Inventories
Brent crude oil for December settlement rose $1.28, or 1.3 percent, to a record $94.54 a barrel on the London-based ICE Futures Europe exchange at 2:16 p.m. Singapore time.
Today's Energy Department report will probably show U.S. oil stockpiles fell 1.5 million barrels last week, based on the median estimate in a Bloomberg News survey of 16 analysts. Inventories held 312.7 million barrels on Oct. 26, the Energy Department reported last week.
Refiners probably used 86.8 percent of their plant capacity, 0.6 percentage points more than a week earlier, and the first increase in four weeks, according to the survey.
``Expectations of an inventory drawdown and the North Sea supply disruption are the major drivers now,'' Astmax's Emori said. ``That's prompting investors to chase up the price.''
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