Keeping an eye on oil

Crude prices flirted with $90-a-barrel today and you have to believe that the century mark is not far off. That's another all-time record - even accounting for inflation. Part of the explanation for the run-up involves the world's unsettled state - Turkey's prime minister has been given the authorization to use military force against the Kurds in northern Iraq (sound familiar?), and there's today's massive bomb blast in Karachi, just hours after the arrival of Benazir Bhutto. But beyond global jitters are a bunch of technical factors, especially the ever-weakening dollar. If the dollar is weak, oil becomes cheaper to purchase when using other currencies. One other explanation: lots of speculation that the Fed will cut interest rates in a couple of weeks. That would cut borrowing costs and presumably lead to a perkier economy - and that would boost demand. “The issue seems no longer to be whether oil will reach $100, but when,” said Barclays Capital analysts Paul Horsnell and Kevin Norrish. Might be a good time to fill your tank. (Bloomberg, Energy Roundup)