Crude oil prices increased by over $1 a barrel yesterday as a declining dollar encouraged investors to buy stocks as an inflation hedge, or investment intended to protect against risk of inflation. (Natural resources operations stocks are one of the most popular commodities used as an inflation hedge, as its value predictably rises with inflation.)
“At this stage, the gyrations of the dollar are the primary movers of the oil market,” said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA, Inc. in New York. “The focus will remain on the value of the dollar against the euro.” The price of bulk oil is up about 59% from a year ago.
(Information Courtesy of Bloomberg News)