Oil surges as investors hunt an 'anti-dollar'

Can't get away from the US Dollar fast enough

By Ambrose Evans-Pritchard 1:43am BST 19/04/2008
Oil prices have surged to almost $115 a barrel as China builds up stocks before the Olympics and hedge funds pour money into commodity futures as a way to exploit the collapse of the dollar.

Global crisis: the Total oil refinery in Belarus. Russian output has dropped 1pc
The Opec producers cartel yesterday defied calls from Gordon Brown for a boost in output to help ease the global shortage, sticking to its target of 32m barrels per day (bpd) for the next three months.
There is some evidence that Opec has actually cut output by 350,000 bpd since the start of the year - a hostile move in the current climate. It blames the latest spike on "speculators", claiming that world demand will fall 1.4m bpd to 85.7m this quarter as the US grapples with recession.

Nobody else can step into the breach. Output is falling in the non-Opec trio of Britain, Norway and Mexico. Russia's production slipped 1pc in the first quarter. The cost of developing oil fields worldwide has doubled in three years. The cost of operating an oil rig per day has risen from $200,000 to $600,000 since 2003. ..."

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Authorities lose patience with collapsing dollar

By Ambrose Evans-Pritchard 1:44am BST 19/04/2008
Jean-Claude Juncker, the EU's 'Mr Euro', has given the clearest warning to date that the world authorities may take action to halt the collapse of the dollar and undercut commodity speculation by hedge funds.

Jean-Claude Juncker, who is calling for Washington to take steps to halt the slide of the dollar
Momentum traders have blithely ignored last week's accord by the G7 powers, which described "sharp fluctuations in major currencies" as a threat to economic and financial stability. The euro has surged to fresh records this week, touching $1.5982 against the dollar and £0.8098 against sterling yesterday.
"I don't have the impression that financial markets and other actors have correctly and entirely understood the message of the G7 meeting," he said.