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How high can it go?

Oil futures set new record highs on Tuesday and further gains look probable. On Tuesday, New York light crude set an all-time high of $118.05 a barrel, while Brent futures for June delivery reached a record of $115.03/b.

The non-appreciation of the dollar – which has caused a steady flow of investment funds into commodities – is widely regarded as a primary cause of seemingly unstoppable oil-price inflation. And, say analysts, there is little indication that prices have topped out, as technical momentum from the recent rally continues to push futures into unchartered waters: prices are likely to reach at least $120/b before easing and may well reach $125/b or $130/b. Robust support is seen at the $106-109/b level. Geopolitical events are also providing support, primarily fears of disruptions to Nigerian crude exports – an important source of oil for the US market. Royal Dutch Shell has said that it may not

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