Oil Hits Record near $140 a Barrel on Dollar

June 16, 2008 7:30:00 AM PDT
Oil futures are hitting a new milestone near $140 a barrel, a dramatic surge analysts attributed to the weakening dollar. Light, sweet crude for July delivery rose to a trading record of $139.89 a barrel Monday, but retreated slightly to trade up $4 at $138.86 a barrel on the New York Mercantile Exchange.

The dollar fell on a weak report on New York state manufacturing activity, analysts said. Many investors buy commodities such as oil as a hedge against inflation when the dollar falls. Also, a weaker dollar makes oil less expensive to investors dealing in other currencies.

Many analysts believe the dollar's protracted decline is a major factor behind oil's doubling in price over the past year.