Sinagpore: Oil prices rose above $93 a barrel to a new trading high in Asia Monday on a weak US dollar, growing political tensions in the Middle East and worries about the supply outlook ahead of the Northern Hemisphere winter.
“The strong price is due to supply concerns in general, on top of which we have the geopolitical news,” said Victor Shum, a Singapore-based energy analyst with Purvin & Gertz.
Light, sweet crude for December delivery rose as much as $1.34 to $93.20 a barrel, a new intraday record, in early afternoon Asian electronic trading on the New York Mercantile Exchange, before slipping back to $93.05.
That was still up $1.19 from the record close of $91.86 a barrel on 26 October. The previous trading high was $92.22 a barrel, set on 26 October.
The US dollar’s descent has drawn investors to crude futures as a hedge against the weakening currency and made dollar-denominated oil futures less expensive to people dealing in other currencies, said David Moore, commodities strategist with the Commonwealth Bank of Australia in Sydney.
A rumbling of tensions in the Middle East also has worried traders about the disruption of oil exports.
A sharp escalation in fighting between Turkey and Kurdish rebels has brought Turkey to the brink of sending troops south across the border into Iraq, and the United States last week announced harsh penalties against Iran in hopes of increasing pressure on the world financial system to cut ties with the country.