Crude oil ends at new record close of $100.74

2008-02-21 09:46:17 [ Big Normal Small ]    　Comment

Crude oil for March delivery rose 73 cents on Wednesday to finish at a new record closing high of 100.74 dollars a barrel on the New York Mercantile Exchange.

Earlier in the session, the March contract, which expired Wednesday, hit a record all-time high of 101.32 dollars a barrel.

This was mainly because traders took the Federal Reserve's weak economic report as a signal that more interest rate cuts are coming, analysts said.

The 100-dollar-a-barrel milestone was first reached in early January.

The Federal Reserve said Wednesday that it expects to see higher unemployment for the rest of 2008, as well as a reduction in economic growth in the minutes released from its meeting in late January.

The Fed also confirmed that it is willing to do more to help the economy find its footing.

"The Fed minutes were a reason to buy," said senior analyst Phil Flynn of Alaron Trading. "When the market saw that the Fed was still talking about cutting interest rates, that was a cue to buy oil."

The Fed statement fueled perception that it may cut interest rates again to keep the economy afloat, which would also sustain demand for oil, said Flynn.

Crude traded lower earlier in the day after Goldman Sachs advised investors to sell to lock in profits. However, the investment bank said it expects oil to hit 105 dollars a barrel by the end of the year, according to the Associated Press.

Wednesday marked the last day of trading for March crude oil contracts. The April contract was also above 100 dollars a barrel.

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