Oil Hikes Higher for U.S. as Claims on Unemployment is Study

Car lights are seen streaking past an oil rig extracting petroleum in the Los Angeles area community of Culver City, California.

3 July 2008

Oil prices briefly soared to a record near $146 a barrel Thursday, then eased when the European Central Bank did not signal more rate hikes and a report showed unemployment in the United States has continued to climb.

On Wednesday, the contract set a new closing record for floor trade at $143.57 — a full $2.60 above the previous close.

U.S. employers cut payrolls by 62,000 in June, the sixth straight month of nationwide job losses, underscoring the economy's fragile state. The unemployment rate held steady at 5.5 percent.

The weak economy has U.S. consumers cutting back on driving and paring other energy related costs.

The nation's services sector declined unexpectedly in June after two months of growth, as new orders fell sharply and oil prices took their toll on businesses.

Some economist are speaking of saber-rattling, with the idea that the oil situation with the increases, is due to the U.S. creating further instability in the Middle East; especially towards threats of war towards Iran.

While the majority of the world believes it is still the plummeting U.S. dollar, especially the increasing instability of U.S. economy and its effect on the world market. There are even long-term predictions, that the U.S. economy is going further into full collapse.