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ALEX CHADWICK, host:

From NPR News, it's DAY TO DAY.

Oil prices went above $92 a barrel on world markets today. That is a new record. Many analysts foresee and anticipate even higher prices - $100 a barrel and more.

Bob Moon of MARKETPLACE joins us now.

Bob, these prices just can't go up for the heck of it, right? I mean, something's got to be driving this.

BOB MOON: Yeah. You got a few minutes, Alex? Because we've got a long list of all kinds of really seemingly disjointed reasons. We've got investors connecting all these dots and that's touched off some really wild speculation, frankly. They're making a lot out of the new economic sanctions that the U.S. has just imposed against Iran.

Of course, that adds to the tension between the two countries. We are the world's largest oil consumer; they are the fourth largest oil producer. At the same time, rebel gunmen forced the shutdown of more oil production in Nigeria yesterday.

But there's something else that may explain why OPEC seems content to let this play out. One top official of OPEC told the Wall Street Journal that the world oil cartel doesn't see a need to increase output right now. Hmm. Why would that be? Well, we just spoke this morning to Barbara Shook, who watches the oil markets for Energy Intelligence in Houston, and she points out that nearly everywhere in the world, oil is sold in U.S. dollars. That's the currency of choice, but it's not so choice right now.

Ms. BARBARA SHOOK (Energy Intelligence Group): The value of U.S. dollar is declining seriously on a daily basis against most of the world's major currencies. So if oil producers are to have the same purchasing power with the revenues they get for their production, then the price has to go up.

MOON: But even Shook told us that's not the only reason. Much of this is being fueled — excuse the expression — by simple momentum in the bullish oil markets.

CHADWICK: Huh. Well, $92 a barrel, highest price ever. But then factor in inflation and it's - it's maybe not as bad as the '70s?

MOON: Well, maybe not quite. Back in the early 1980s, a barrel of oil sold for around $38 - that was the high. If you take those same dollars and you adjust them for inflation, depending upon the method that you use for that, a barrel of oil in 1980 would be worth anywhere from 96 to $101 or more today.

CHADWICK: I can only imagine what this is going to mean the next time I have to fill up my car.

MOON: Yeah. Gasoline prices really haven't been rising as fast as crude oil has been so far, but the analysts do tell us that it's likely consumer prices are going to soon mimic the spike in crude oil prices both at the gasoline pump and especially when it comes to home heating oil prices.

And by the way, the Bush administration is voicing some concern about this. Treasury Secretary Henry Paulson said just today that these surging oil prices are not positive for the economy.

CHADWICK: So is it going to go over a hundred dollars or not?

MOON: The analysts seem to be split around 50-50 on that question. Some say it might, some say it might even go down.

CHADWICK: Huh. Thanks, Bob.

Bob Moon of public radio's daily business show MARKETPLACE from American Public Media.

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