(Updates prices, adds details)
By Osamu Tsukimori
TOKYO, March 17 (Reuters) - Oil jumped to a record near
$112 a barrel on Monday, as a surprise weekend cut in the
Federal Reserve discount rate and the fire sale of stricken
U.S. investment bank Bear Stearns <BSC.N> sent the dollar to
all-time lows.
Crude for April delivery <CLc1> was up $1.16 at $111.37 a
barrel by 0752 GMT, off a record $111.80 hit earlier.
May London Brent crude <LCOc1> was $1.30 higher at $107.50
a barrel, after trading as high as $107.97 earlier, near the
April contract's record $108.02 peak on Friday.
"The recent oil prices have been swayed by the currency
moves, including this latest rally to a record," said Tony
Nunan, risk management executive at Tokyo-based Mitsubishi.
"The dollar weakness is the factor at the moment."
The dollar plunged across the board on Monday as the
spreading U.S. financial crisis led to JPMorgan Chase acquiring
stricken investment bank Bear Stearns, stirring fears that more
financial firms may become casualties.
The Federal Reserve took more emergency measures to stem
the fast-spreading financial crisis, cutting its discount rate
on Sunday and opening up discount window lending to major
investment banks, a tool not used since the Great Depression.
The dollar slid 3 percent against the yen at one point to
its lowest since 1995, while the euro hit a freak peak against
the dollar, as investors became more convinced that the Fed and
other major central banks may have to conduct coordinated
dollar-buying intervention to stem the sell-off.
The dollar later trimmed some losses after Japanese Finance
Minister Fukushiro Nukaga stepped up his verbal warnings on
Monday, saying he is watching currency market moves in
cooperation with authorities in the United States and Europe.
Fed policy-makers are set to meet on Tuesday and are widely
expected to lower the benchmark federal funds rate by up to a
full-point to try to put a floor under an economy many believe
is already in the throes of recession.
Crude oil prices have jumped about 16 percent so far this
year in part because of a steep decline in the the U.S. dollar
-- a factor that has supported the nominal value of all
commodities priced in the currency.
Oil analysts have said they expect oil's inverse
relationship with the dollar to last until there are
significant signs that underlying commodities demand is eroding
because of the U.S. economic slowdown.
The Organization of the Petroleum Exporting Countries has
shrugged off calls for more supply. Oil markets are rising due
to speculation and the U.S. dollar's fall, not on a lack of
petroleum production, OPEC President Chakib Khelil said on
Sunday, the official Algerian news agency APS reported.
[]
Adding support to energy markets, Iraq halted pumping of
Kirkuk crude through its northern pipeline to Turkey on Sunday
due to a minor breakdown, but pumping was expected to resume
soon, a shipping source said on Monday. []
In Nigeria, an oil workers' union is calling for a strike
in the oil sector starting on Wednesday to protest about a
labour dispute at the Nigerian arm of ExxonMobil <XOM.N>, a
union boss said on Monday. []
(Reporting by Osamu Tsukimori; Editing by Michael Urquhart)
