Wednesday, February 27, 2008
Inflation fears – commodities are generally considered a hedge against inflation
The price of oil has hit a record high for the second day running, touching $102.08 a barrel for US sweet crude. However, the figure is still surpassed in inflation-adjusted terms by the peak of $102.53 reached in 1980, the International Energy Agency says. The oil price surge is supported by traders switching their cash out of shares and currencies and into commodities, traders say. Fears that producers' cartel Opec will cut supply have also been blamed.