NEW YORK, June 6 (Xinhua) -- Crude prices rocketed
more than 10 U.S. dollars in a day on Friday, approaching 140 dollars a barrel
on tension in Middle East, weak dollar and Morgan Stanley's forecast.
Light, sweet crude for July delivery rose 10.75
dollars to 138.54 dollars a barrel on the New York Mercantile Exchange after
hitting 139.12 dollars, a new record high earlier.
Friday's surge was the biggest single-day price
increase in the history of the New York Mercantile Exchange crude contract.
"Everyone was holding their collective breaths today
as they witnessed this super spike in oil," said Wall Street Strategies' senior
research analyst Conley Turner.
¡¡¡¡TENSION IN MIDDLE EAST
"Crude prices catapulted to an all time new record
surpassing 139 dollars per barrel much to the consternation of all market
participants," Turner told Xinhua.
"There were several factors driving this trade. First
and foremost were comments made out of Israel by its Prime Minister Ehud Olmert
that the 60-year-old nation will attack Iran if it does not abandon its nuclear
program," he explained.
The implication of such an act caused traders and
investors to bid up the commodity as that would certainly lead to supply
constraints in an overly supply sensitive world.
Iran, the second-biggest producer in the Organization
of Petroleum Exporting Countries, has been accused of trying to develop nuclear
weapons under the cover of a civilian nuclear program. However, the country has
denied those charges and insisted that its nuclear program is for peaceful
purposes only.
The Pentagon indicated despite the rhetoric, nothing
new has changed on the ground and there would be no reason for Israel to engage
in such an act at this time.
"Israel is very concerned about their future and
their safety," while the United States "is trying to solve Iran's nuclear issue
through diplomacy," said the White House Friday.
WEAK DOLLAR AND MORGAN
STANLEY'S FORECAST
Crude prices were also boosted by weak dollar, which
continued its downward spiral after the European Central Bank President
Jean-Claude Trichet commented Thursday that bank could raise interest rates in
the near future.
The dollar fell against the euro further Friday after
a higher-than-expected unemployment data in the United States.
A Labor Department report showing the U.S.
unemployment rate jumped half a percentage point to 5.5 percent last month, the
biggest monthly increase since 1986, dragged the dollar even lower.
"The price of oil has an inverse relationship with
the dollar investors oil and other commodities as a hedge against inflation when
the dollar is declining," Turner pointed out.
The third leg supporting Friday's rise in oil prices
had to do with the comments made by a major brokerage firm that strong demand
out of Asia can drive the price of oil as much as 150 dollars by July 4th.
Middle East oil exports are stable but Asia is taking
an unprecedented share, said Morgan Stanley in its latest report, adding U.S.
inventories have dropped by 35 million barrels since March.
Last month, Goldman Sachs predicted oil prices could
tip 200 dollars a barrel within the next two years.
"We are really in bubble territory and betting the
ranch on when the bubble will pop could be a great, if you have two ranches,"
said the analyst.
"The path of least resistance is up right now and
that 150 dollars per barrel prediction by July 4 could well be a self fulfilling
prophecy," he added.
Dollar falls as U.S. jobless rate
rises fast
NEW YORK, June 6 (Xinhua) -- The dollar fell against most
major currencies on Friday after a government report showed that U.S. jobless
rate soared in May.
The Labor Department on Friday said 49,000 jobs were shed
by employers last month, on top of 28,000 in April. The unemployment rate surged
to 5.5 percent in May from 5 percent in April, the biggest monthly jobless rate
jump in 22 years. Full story
Wall Street plummets on unemployment
data, rocketing oil prices
NEW YORK, June 6 (Xinhua) -- Wall Street plummeted Friday
on higher-than-expected unemployment data and rocketing oil prices with the Dow
Jones Industrial Average dropping more than 400 points.
The U.S. Labor Department said the unemployment rate
rose to 5.5 percent in May from 5.0 percent in April. That was the biggest
one-month jump in the rate since February 1986. Wall Street, on average, had
predicted an uptick to 5.1 percent. Meanwhile, employers clamped down on hiring
in May and the number of U.S. jobs shrank for the fifth straight month by
49,000. Full story
