Hewehi Thinks Oil To Reach $120

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.

But many analysts believe the declines may be temporary, and that oil is poised to rise above $103.76 a barrel. That's the price many believe to be oil's all-time high on an inflation-adjusted basis, set in early 1980 during the Iranian hostage crisis.

Gasoline and diesel prices, meanwhile, continued to soar. Gas prices rose 0.3 cent overnight to a national average of $3.164 a gallon, creeping closer to last May's record of $3.227 a gallon, according to AAA and the Oil Price Information Service. Diesel prices jumped 1.5 cents to a new record national average of $3.642 a gallon.

While most Americans fuel their cars with gasoline, most of the products they buy are transported by trucks, trains and ships that burn diesel. While gas prices are unlikely to rise as high as $4 a gallon, diesel may well pass that psychologically important level this spring, boosting prices of nectarines, computers, clothing and virtually every other consumer product, said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J.

"It's everything that gets shipped," Kloza said of diesel fuel's impact on the economy. "That is the one that is much scarier."

Gas and diesel prices are following crude oil, which spiked to a new record of $103.05 overnight. In midday trading on the New York Mercantile Exchange, light, sweet crude for April delivery fell 44 cents to $102.15 a barrel.

The dollar rose against the euro Friday, reversing one of the factors that has attracted huge flows of investment capital to the oil market. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is falling. That logic tends to reverse itself when the dollar weakens.

Also giving investors reason to sell was Turkey's decision to withdraw its forces from northern Iraq, which they invaded earlier this week in search of Kurdish rebels. Turkish attacks on Kurds in northern Iraq -- and the concern that Kurds would retaliate by cutting off oil supplies -- have helped propel oil to new records in recent months.

Traders also continue to fret over OPEC, which meets next week to consider production levels. The prospect that the Organization of Petroleum Exporting Countries might cut production levels has helped fuel oil's recent rise. But with prices holding above $100, most analysts now expect OPEC to hold production steady.

Despite oil's modest retreat Friday, many analysts believe the investment flows that have pushed prices higher this year are not about to dry up.

"We've just got a huge, huge speculative drive going on here," said Jim Ritterbusch, president of Ritterbusch and Associates, an energy consultancy in Galena, Ill. "The fresh buying brings in new buying."

Many analysts believe the underlying fundamentals of oil supply and demand do not justify such high prices. Some predict speculative investing could push oil prices as high as $120, while others argue prices have formed a bubble, and could crash back to the $70 range.

Other energy futures also fell Friday. In other Nymex trading, March heating oil fell 0.35 cent to $2.8421 a gallon while March gasoline futures fell 1.57 cents to $2.48 a gallon. April natural gas futures fell 8.8 cents to $9.355 per 1,000 cubic feet.

In London, Brent crude futures fell 52 cents to $100.38 a barrel on the ICE Futures exchange

NEWS AT A GLANCE

Visa readies largest U.S. IPO

Visa International said it expects to earn up to $18.76 billion in its long-awaited initial public offering, making it the largest U.S. IPO on record. The previous record was AT&T Wireless in 2000, at $10.6 billion. In a filing with the Securities and Exchange Commission, Visa said it would sell 447.2 million shares, including 406.6 million to the public, at between $37 to $42 a share. Visa will trade under the ticker symbol "V" on the New York Stock Exchange. The SEC filing also show that Visa beat rivals MasterCard and American Express last year in terms of number of transactions and dollar amount.

Electronic Arts bids on 'Grand Theft Auto' maker

Video-game maker Electronic Arts offered $2 billion to acquire Take-Two Interactive Software, the maker of top-selling game "Grand Theft Auto." Take-Two rejected the offer over the weekend, and Electronic Arts moved yesterday to push the takeover bid through shareholders. The $26-a-share offer is 64 percent higher than the closing price before the bid. EA's move follows Vivendi's pending purchase of rival Activision, but comes before Take-Two's release of expected blockbuster "Grand Theft Auto IV." Still "the price is more than fair," said Wedbush Morgan Securities analyst Michael Pachter. "I'm quite confused why Take-Two would reject it."

Adobe takes on PC-Internet divide

Adobe Systems is releasing its AIR software development system today, providing a way for programmers to create hybrid Internet-based applications that run on PC desktops when a computer is offline. Some companies have already developed AIR versions of their online services; eBay is offering eBay Desktop, for example, which allows auctions management offline. Adobe is facing off against Google, Microsoft, and others to blur the line between the PC desktop, smart phone, and Web browser. "This is a battle for the hearts and minds of people who are building things," said Adobe chief technology officer Kevin Lynch.

Tackle the ice, but hold the salt

Rock salt is plentiful and cheap, and cities have used it to de-ice roads since World War II. But several states and municipalities are looking to overthrow the salt regime, which is also harmful to roads, cars, and vegetation. Akron and other Ohio towns use a goo derived from sugar beets to de-ice roads, and New Jersey uses a rum derivative. And in Colorado, self-described "obsessive-compulsive" lab rat Steve Bytnar has developed a proprietary white liquid that is used in the Denver area. These goos and liquids cost more up front, but their proponents argue that they work better and save money over the long run.

BAD DAY FOR: Sweet 16, as the number of 16-year-olds with a driver's license fell to 29.8 percent in 2006, from 43.8 percent in 1998, amid higher insurance rates, more restrictive laws, and a shift to more costly private driving schools. Parents are also more willing now to chauffeur their driving-age children around.

NOTED: Gas prices have risen 16 cents over the past two weeks, to an average of $3.10 a gallon, according to the Lundberg Survey. That's about 75 cents higher than a year ago. The rising prices mirror the price of crude oil. Trilby Lundberg, the survey's publisher, dismissed as "absurd" the idea that the Organization of Petroleum Exporting States would raise output soon. "They are certainly loving these prices,"