In global petroleum market news, oil futures soared above $101 Wednesday, after the Fed lowered its forecast for US economic growth this year, convincing energy investors that the central bank will slash interest rates further. The contract for March delivery of light sweet crude rose 73 cents to settle at a record $100.74 on NYMEX after earlier rising as high as $101.32, a new trading record. On Tuesday, the contract spiked $4.51 a barrel. In London, April Brent crude fell 14 cents to settle at $98.42 a barrel on the ICE Futures exchange. The Fed said damage from the housing slump and problems in the credit markets will slow economic growth to between 1.3-2% this year, down from a previous forecast for GDP growth of between 1.8% and 2.5%. In our view, oil investors could read this news in one of two ways: selling on concerns that the economy, and therefore demand for oil, is cooling; or buying on the prospect that interest rates will fall, weakening the dollar and feeding new buying of oil futures. On Wednesday, investors unquestionably subscribed to the latter view. Trading in the expiring March contract was about 10% of the level of trading in April crude oil, which will become the front-month contract as of today. When volumes are low, price swings tend to be erratic. Two new economic reports Wednesday suggested the US economy is cooling. The Labor Department said its Consumer Price Index, a measure of inflation, rose by 0.4% last month, outpacing the consensus forecast. The US Commerce Department, meanwhile, said construction of new homes and apartments rose by 0.8% in January, but that applications for building permits, an indicator of future activity, fell by 3%. The reports came a week after the Energy Department, OPEC and the IEA all downgraded their oil demand growth forecasts for this year. But the prospect that the Fed will reduce rates proved too strong, feeding a new buying frenzy. Looking ahead, we can see that investors are piling into oil and commodities for a safe haven, assuming that commodities could outperfom equities and also as hedges against inflation. We expect to see WTI and Brent consolidate in the high $90s, with frequent moves above $100. Also, the market has not yet fully priced the recent market momentum into Russian oils, which points to some strong upside ahead on the domestic market.