Oil hits record $100
NEW YORK (Reuters) - Oil vaulted to a record $100 a barrel on Wednesday as geopolitical turmoil, tight energy stockpiles, and a weak dollar triggered a flood of speculative buying, dealers said.
U.S. crude gained $4.02 to $100 a barrel by 12:13 p.m. EST. London Brent crude rose $3.63 to $97.48.
"It is a combination of things ... a weaker dollar -- on expectations of further interest rate cuts -- and Nigeria," said Nauman Barakat of Macquarie Futures USA.
Suspected militant attacks Tuesday in Nigeria's oil city Port Harcourt have heightened concern over the potential for further disruptions in shipments from the world's No. 8 oil exporter.
"With the military and the militant warlords engaged in a violent tit-for-tat, the risk for oil disruptions in Nigeria remains higher than in the past few months," said Olivier Jakob of Petromatrix.
Frequent attacks by militant groups since February 2006 have driven thousands of foreign oil workers from the oil-rich Niger Delta and cut oil exports by about 20 percent.
Oil rose nearly 58 percent last year, the biggest annual gain this decade, as the dollar fell and U.S. oil inventories sank.
Investors will also be particularly sensitive to any signs of further fund investment in commodities at the start of the year as the sector rebounded from a loss in 2006, with the broad Reuters/Jefferies CRB Index up nearly 17 percent in 2007.
Further drops in U.S. fuel stocks were anticipated. Weekly data will be released Thursday, a day later than usual due to the New Year holiday.
Stocks of crude in the United States were expected to have fallen 1.8 million barrels last week, the seventh straight week of decline, as refiners processed more crude, according to a Reuters poll.
Distillate stocks, which include heating oil and diesel, were forecast to have increased by 300,000 barrels after three weeks of decline, the survey showed.
(Additional reporting by Peg Mackey in London and Fayen Wong in Sydney; Editing by David Gregorio)