Oil Steadies while Gold Breaches $800

Oil consolidated after coming close to $100 a barrel during Wednesday’s session while gold traded above the $800 level but trading in commodities markets was expected to be lighter than normal on Thursday due to the Thanksgiving holiday in the US.

Nymex January West Texas Intermediate rose 3 cents to $97.34 a barrel after hitting a record of $99.29 in Asian trading on Wednesday. ICE January Brent rose 27 cents to $95.11 a barrel.

Oil’s latest efforts to reach the $100 level were thwarted by profit taking after the release of the latest US weekly inventories data which showed a decline of 1.1m barrels last week, confounding the consensus market forecast for an increase of 0.6m barrels. However, a rise of 1.2m barrels in crude stocks at Cushing, Oklahoma (the delivery point for WTI) mitigated the impact of the unexpected fall in total crude stocks.

US demand appears to be holding up well in the face of record crude and heating oil prices with total product demand up by 0.2 per cent compared to the same period a year ago, averaging 20.76m barrels a day over the past four weeks.

Gold traded at $803.00 a troy ounce, helped by dollar weakness and fears of an oil-led inflation spike.

Financial Times
11/22/2007 8:10:18 AM