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Last Updated: Thursday, 28 February 2008, 21:32 GMT
Oil price hits a new record high
Oil drums
The price of a barrel of light sweet crude has risen
The price of a barrel of oil has hit a record high of $102.59 in New York because of strong demand and the further weakening of the dollar.

The price of a barrel of sweet crude finished the normal trading period up 3% and continued to rise towards almost $103 in after-hours trading.

The falling value of the US currency and the prospect of lower interest rates pushed up the oil price.

Crude prices are very close to the inflation-adjusted high set in 1980.

The International Energy Agency said the price of a barrel of oil peaked at $102.53 in April 1980, after taking account of inflation.

Gas concerns

The oil price was also driven higher by concerns about a fire at the Bacton gas terminal in Norfolk. Shell said the interconnector, which brings natural gas from Europe ashore in the UK, had not been affected.

"I understand that this fire at the UK natural gas terminal is creating a strong push in the European market, and that is translating here," US-based energy analyst Tim Evans from Citigroup Futures Research said.

The US dollar continued to weaken on Thursday, hitting an all time low against the euro of $1.52. Along with worsening US economic growth figures, this drove investors to put money into the oil markets.

They also continued to turn to metals, often regarded as safe havens, with gold, silver and palladium hitting historic levels.

"People just want to have hard assets," said Bruce Dunn, vice president of trading at Auramet Trading

"I think people are very concerned. The economic news coming out of the United States is just bad," he said.

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