Follow the bouncing oil prices
Oil traders work on the floor of the New York Mercantile Exchange in New York City, as crude oil rose more than $9 to a new record as the dollar weakened due to a new unemployment report.
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Scott Jagow: The price of oil is back down again this morning at $107 a barrel. Yesterday, it skyrocketed -- it was up around $120 for a while. Our European Correspondent Stephen Beard joins us. Stephen, what in the world's going on with oil?
Stephen Beard: One key factor yesterday was that Monday was the deadline for buying oil for October deliveries. So there was a bit of a last-minute rush, plus the uncertainty about the bailout of the banking system, that, it is suggested, drove speculators into oil as a safe haven. Well, but it's not looking so much of a safe haven today.
Jagow: Yeah, but we're quite a bit above where we were last week, which was around $90 a barrel. So, what is the underlying supply and demand situation right now?
Beard: It looks to be a little bit tighter than many market operators were expecting. The story which brought oil down from $147 a barrel was slowing economies in the U.S. and Europe particularly. But, of course, we had earlier this month, OPEC's decision to cut production by a half million barrels a day, and, of course, output shutdowns and damage to infrastructure caused by Hurricane Ike and Gustav and that has reduced supply and put upward pressure on the price of oil.
Jagow: All right. Stephen Beard in London, thank you.
Beard: OK, Scott.