Light, sweet crude for December delivery rose by almost six dollars to US$69.88 on the New York Mercantile Exchange after rising as high as US$71.77.
As the US Presidential Campaign and elections draw to a close, oil prices have risen to US$70 a barrel. This price surge reflects strengthening of stock markets globally and a weakening dollar. Commodities such as oil are used as a hedge against inflation and a weak dollar. Investors flood the crude futures market when the dollar weakens. A weak dollar also makes oil less expensive to buyers dealing in other currencies.
Outlook seems to be brighter in USA as the Dow Jones industrial average jumped 200 points despite a new Commerce Department report that factory orders fell more than estimated in one month - by 2.5% in September.
An extraordinary change in the way Americans use fuel has been witnessed over the past few months amid collapsing home prices, a shaky job market and gasoline priced about US$4/gallon. Recent dips in fuel prices have not managed to considerably lift buying as market enthusiasm has been lost amid macro economic fears. Analysts had believed that booming economies of India and China would pick up any slackening of demand if Western nations went into recession. That view has weakened in recent months, as the economic crisis in the United States spread across the globe.