03-20-2008, 10:20 AM
Quote:
Oil futures extended their declines Thursday, sliding below $100 a barrel at times as concerns about the economy and demand for oil grew and the dollar strengthened.
Retail gas prices, meanwhile, fell further below their recent records, while diesel rose to a new record above $4 a gallon.
For a second day, the oil market appeared focused on the economy and oil's underlying supply and demand fundamentals -- factors it ignored in recent weeks while rocketing to a series of new records. However, some analysts said oil's price swoon may not last for long; most investors expect the Federal Reserve to cut interest rates several more times this year, moves that are sure to put new pressure on the dollar.
Lower interest rates tend to weaken the dollar, driving investors to commodities such as oil that they view as a hedge against inflation. A lower dollar also makes oil less expensive to overseas investors -- a trend that reverses when the dollar strengthens, as it did Thursday.
Retail gas prices, meanwhile, fell further below their recent records, while diesel rose to a new record above $4 a gallon.
For a second day, the oil market appeared focused on the economy and oil's underlying supply and demand fundamentals -- factors it ignored in recent weeks while rocketing to a series of new records. However, some analysts said oil's price swoon may not last for long; most investors expect the Federal Reserve to cut interest rates several more times this year, moves that are sure to put new pressure on the dollar.
Lower interest rates tend to weaken the dollar, driving investors to commodities such as oil that they view as a hedge against inflation. A lower dollar also makes oil less expensive to overseas investors -- a trend that reverses when the dollar strengthens, as it did Thursday.
http://biz.yahoo.com/ap/080320/oil_prices.html
However gold has also fallen steep for a second straight day
