Oil plunges to $106+Submitted by JohnE1313 on Mon, 03/17/2008 - 10:07
NEW YORK, March 17 (AP) - New York oil prices hit a fresh all-time high of $111.80 per barrel in off-hours trading early Monday and later plunged on U.S. economic doubts, which prompted investors to take short-term profits.
The benchmark April contract for West Texas Intermediate crude oil on the New York Mercantile Exchange surpassed the previous high of $111.42 reached late Sunday.
At 9:10 a.m., the key contract traded at $106.42, down $3.79 from last Friday. It briefly fell to the $105 level.
Investors snapped up oil to hedge against possible surges in inflationary pressure in the U.S. economy on expectations that the recent dive in the dollar's value will put upward pressure on prices, traders said.
A weak dollar raises dollar-denominated costs of imports into the U.S. market.
The advance in crude prices also stemmed from the diversion of short- term investors' funds to commodity markets away from Japanese and Asian stock markets, where shares dived, they added.