Oil rises above 99 dollar a barrel in Asian trading

Nov 21, 2007, 14:36 GMT

Singapore - The price of crude oil hit a record Wednesday in Asian trading, surpassing 99 dollars per barrel.

The price of light, sweet US crude, which is seen as a reference point for worldwide oil prices, rose closer to the 100-dollar-a-barrel mark before settling back down to 98.64 dollars a barrel in the afternoon.

The hike in Asia came after the price of light, sweet crude for January delivery also surpassed 99 dollars for the first time in New York.

It rose as high as 99.29 dollars per barrel in after-hours electronic trading on the New York Mercantile Exchange before also falling below 99 dollars to 98.53 dollars a barrel, up 50 cents from its record floor close Tuesday.

Analysts attributed the price rises to the declining value of the US dollar, the US Federal Reserve's prediction of slower-than-expected growth in the US economy next year and speculation that the US central bank would again cut interest rates. Investors seeking to offset the falling greenback are putting their money into rising commodities, including oil futures.

Concerns about oil supply also drove up the price as winter in the United States and Europe set in and after Royal Dutch Shell Plc said a fire at an Alberta oil facility halved its output and might cut deliveries to US refineries.