Here we go again: another new record for oil

| Friday, October 19, 2007

Oil prices continued to reach new heights as the week drew to a close, topping $90 a barrel in after-market trading Thursday.

By Friday morning, however, light, sweet crude had fallen to $89.92 in trading on the New York Mercantile Exchange.

Although external forces – such as mounting tensions in the Middle East – had previously been blamed for the price increases, analysts are now saying speculative buying by traders is almost exclusively to blame.

According to The Associated Press, the general consensus now is that investors are being drawn to oil and other energy futures as a means of hedging against a weakening U.S. dollar. Some analysts are questioning just how long the market can sustain these high prices.

Meanwhile, ProMiles is reporting a national average price for diesel, of $3.12 per gallon. AAA, incidentally, is reporting a national average for diesel of $3.13 a gallon, just 10 cents shy of the all-time record of $3.23 per gallon set back in 2005.

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