Oil hits record $107, U.S. dollar in focus

LONDON (Reuters) – Oil hit a record high of $107 a barrel on Monday, reversing earlier losses as investors sought oil as a hedge against a depressed dollar and inflation.

A rush by financial funds into commodities and political tensions are the prime drivers of a rally that has lifted oil’s average to above $95 for the year.


U.S. crude jumped $1.85 to $107 a barrel. It had sunk to $104.08 in earlier trading and by 1451 was up $1.50 at $106.65. London Brent crude was up 40 cents at $102.78.

Fears of recession, following the biggest U.S. job losses in five years and strains in the credit market, have depressed equities and the dollar while prompting many investors to seek safety in commodities including oil.

“The disconnect between slowing U.S. growth and a soaring commodity/energy complex has truly been quite remarkable,” said Edward Meir of MF Global.

Reuters