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BARELY two months after breaking the landmark US$100-a-barrel level, crude oil hit another milestone late on Wednesday when it briefly surged past US$110 a barrel.
And while it hovered just under US$110 yesterday, economists in Singapore said higher fuel prices could add to existing fears of rising inflation and slower economic growth this year.
New York oil prices set an all-time trading high of US$110.20 per barrel on Wednesday before registering the record closing price of US$109.92.
Market watchers said soaring prices have been fuelled by strong investor demand for commodities to hedge against rising inflation and the ailing United States dollar.
Crude oil, which is priced in the American currency, has become more affordable for buyers holding stronger currencies who then up their demand and purchases.
United Overseas Bank economist Ho Woei Chen said higher oil prices are definitely one of the contributing factors to slower growth. 'But with the economy slowing down, we expect the demand for oil to ease at some point.'
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