Dow jumps 118 after crude oil hits $97

Crude oil hit another record today on growing concern about domestic supplies, and speculation built that the price could top $100 a barrel as early as Wednesday.

Crude finished the day at a record $96.70 a barrel, up 2.9% from Monday. It had been as high as $97.07 in the morning.

The price jump sent energy stocks soaring and was the biggest reason that the stock market finished the day with decent gains.

At the close, the Dow Jones industrials were up nearly 118 points, 0.9%, to 13,661. The Nasdaq Composite Index was up 30 points, or 1.1%, to 2,825, and the Standard & Poor's 500 Index was up 18 points, or 1.2%, to 1,520.

Shares of ExxonMobil (XOM, news, msgs) led the blue-chip index with a 3.1% gain to $90.38. That was worth nearly 23 points of the Dow's gain.

In addition, Apple (AAPL, news, msgs) and Cisco Systems (CSCO, news, msgs) each moved more than 2.5% higher and led technology stocks higher. Cisco reports first-quarter earnings after Wednesday's close.

Crude's big jump came on concern about domestic and global supplies. A big storm in the North Sea was forcing a number of oil companies to shut down production. And domestic supplies were squeezed by storms a week ago that shut in production in Mexico.

The Energy Information Administration forecast today that global demand for oil would be unchanged in 2008 at 1.5 million barrels a day -- even as the price of oil has risen more than 50% since the fall of 2006.

Wednesday brings the weekly report on crude oil supplies, and Alaron Trading analyst Phil Flynn told MarketWatch that he expects domestic inventories to shrink, adding more pressure on prices.

An attack on a Yemeni oil pipeline triggered worries about supplies, and blasts in Afghanistan killed 64 people, adding to concerns about unrest in the Middle East.

But the bigger issue was the continued fall in the dollar, which pushed most the prices of commodities that are denominated in dollars higher. These included crude oil, gold, silver, copper and grains.

Gold closed at $823.40 an ounce in New York, a 1.6% gain and is up nearly 10% since the end of September. Gold stocks jumped on the price gain. Newmont Mining was up 4% to $54.41.

Silver, meanwhile, closed at $15.38 an ounce in New York. And wheat jumped 13 cents a bushel to $7.98. Archer-Daniels-Midland (ADM, news, msgs) jumped 6.9% to $36.89 after the company said its oilseeds processing revenue soared in its fiscal first quarter.

Rallying with ExxonMobil were Valero Energy (VLO, news, msgs), up 4.8% to $72.73; Apache (APA, news, msgs), up 3.6% to $105.96; and Halliburton (HAL, news, msgs), up 2.2% to $40.64.