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SYDNEY - Oil prices dipped yesterday after leaping to a lifetime high of US$100 amid a new-year rush of investor demand fuelled by expectations of thinning US stockpiles, the falling US dollar and geopolitical risks.
US crude traded once at US$100 a barrel in the opening session, surpassing the US$99.29 peak set in November.
Oil prices climbed 58 per cent in 2007, the biggest annual gain this decade, and many fund managers were bracing for another year of volatile but rising commodity prices. Gold also hit a record high on Wednesday.
"We still have our maximum quota on oil and we don't see any reason to lighten up our position at all since all the risks are still to the upside," said Justin Wilkes, a fund manager at Global Commodities in Australia. "Our appetite for oil hasn't waned at all."
Despite the record oil price, the White House said it would not open up the nation's emergency crude oil reserves to bring down prices while two members of the Organisation of Petroleum Exporting Countries said the cartel was powerless to bring the market down.
Oil's surge in the previous session was partly helped by a fresh wave of violence in Nigeria and Algeria, stoking concerns of more supply disruptions.
Suspected militants mounted attacks in Nigeria's oil city, Port Harcourt, on Tuesday, killing 18. Regular attacks by militant groups since February 2006 have already cut oil exports by the world's eighth-largest crude exporter by about 20 per cent.
- Reuters
