oil futures

U.S. oil futures fell more than $3, dropping below $112 a barrel to a 15-week low as the dollar rallied broadly on growing concerns about sliding demand.

The two biggest factors in oil’s high price are the weakness in the U.S. dollar’s exchange value and the liquidity that the Federal Reserve is pumping out.

In an effort to forestall a serious recession and further crises in derivative instruments, the Federal Reserve is pouring out liquidity that is financing speculation in oil futures contracts.

Oil prices dropped Monday, retreating from a record surge late last week, and traders said the market would remain choppy amid jitters about supplies, growing global demand and a weak dollar.

Crude futures made their biggest single-day jump ever Friday, soaring nearly $11 for the day to $138.54 a barrel, a rise of more than 8 percent that battered stocks on Wall Street.

That came after an increase Thursday of almost $5.50, taking oil futures more than 13 percent higher in just two days, easily a record on the New York Mercantile Exchange.

The future of gas prices is on everyone's minds. But does OPEC, gas companies really control the prices at the pump?

No, not really. What is little known is the loophole in oil futures trading sectors in which the likes of Goldman Sachs are driving the price of oil.

Gasoline held steady near an average $3.98 a gallon at the pump Monday as a recent slide in oil futures stalled gas' advance to the $4 mark.

Oil prices, meanwhile, rose modestly on concerns about heating oil supplies and after an OPEC official said there's no need for the cartel to pump more oil.

"U.S. gasoline stocks have certainly dropped quite sharply over the last month"

Oil prices held close to a record above $124 a barrel Friday in Asia as bullish momentum and renewed weakening of the U.S. dollar against foreign currencies kept the commodity on its upward trend.

Oil futures surged to a new record over $120 a barrel Monday as supply threats emerged overseas and the dollar weakened against the euro.

Retail gas prices, meanwhile, fell more than a cent over the weekend, offering further evidence that prices may have peaked for the year.

Gas prices hit $3.60 a gallon and oil futures rose to their own new record near $120 a barrel on Monday as labor actions overseas threatened crude supplies.

Oil prices later retreated to alternate between gains and losses as the dollar stabilized against foreign currencies.

Oil futures retreated from a new overnight record above $103 as the dollar gained strength and Turkish forces withdrew from northern Iraq, removing two of the reasons underpinning crude's dramatic 19 percent rise from earlier this month.

Oil futures rallied again Wednesday, pushing briefly past $101 a barrel after the Federal Reserve lowered its forecast for economic growth this year, convincing energy investors that the central bank will slash interest rates further.

At the pump, meanwhile, gas prices rose another 2 cents overnight.