Oil prices jumped above USD 73 a barrel today in Asia as a weakening US dollar and attacks on oil installations in Nigeria helped push prices to eight-month highs.
Benchmark crude for August delivery was up USD 1.05 to USD 72.54 a barrel by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange after trading as high as USD 73.38. On Monday, it gained USD 2.33 to settle at USD 71.49.
Oil has surged from below USD 35 in March in part on investor concern that massive US fiscal stimulus spending will eventually spark high inflation. Investors often buy commodities such as crude as a hedge against a weakening dollar and inflation.
The euro gained to USD 1.4108 on Tuesday from USD 1.4078 on Monday.
Prices were also bolstered by another round of attacks on Monday by Nigerian militants, who this time partly damaged and shut down a Royal Dutch Shell offshore oil platform.
Nigeria is Africa’s largest oil producer.
Crude trading volume was about three times more than normal today in Asia, said Clarence Chu, a trader at market maker Hudson Capital Energy in Singapore.
China boosted state-set gasoline and diesel prices today to reflect rising global crude costs, days after indicating plans to increase its strategic crude oil reserves by 60 per cent over the next five years.