Oil, metals prices higher

Crude oil prices rose by over $1.50 per barrel on Wednesday and was up by over $5 per barrel for a time shortly after the markets opened this morning after reports that an Iranian missile had hit a US naval vessel. Prices declined from that spike, though, after a US government spokesman denied that any military action had taken place. Prices were also supported by an unexpected drop in US crude oil inventories last week.

The Energy Information Administration issued new data showing that crude oil stockpiles dropped by 900,000 barrels in the week ending March 23. Inventories were instead expected to increase by 1.1 million barrels during the week. Meanwhile, stockpiles of gasoline and heating oil declined by around the amounts expected, with gasoline inventories down by 300,000 barrels and heating oil stockpiles 700,000 barrels lower.

By midday in New York, West Texas Intermediate crude May contracts were $1.53 higher to $64.46 per barrel. May deliveries of Brent crude also gained $1.53 to trade at $66.13 per barrel. Gasoline futures were up less than half a cent to $2.0775 per gallon, while heating oil added 5.61 cents to $1.8425 per gallon. Natural gas gained 20.8 cents to $7.711 per 1,000 cubic feet.

Price for precious metals were higher on Wednesday as markets were unsettled by the rumors of military action in the Persian Gulf region. The rumors turned out to be false, but metals prices stayed higher anyway.

April gold added $4.30 to $666.80 per troy ounce and traded in a range between $663.30 and $669.80 per troy ounce, with the high being reached early in the session. Prices were also supported by comments by US Federal Reserve chairman Ben Bernanke. Spot gold was quoted at $666.10/$666.66 per troy ounce, with the late afternoon fix in London at $666.75 per troy ounce.

In other precious metals, May silver added 17.5 cents to $13.455 per troy ounce, with trading in the range between $13.330 and $13.545. April platinum added $8.80 to $1,250 per troy ounce, while June palladium added $1.85 by the close to $357.85 per troy ounce.

In base metals, three-month nickel was $750 higher to trade at $43,550 per tonne on the growth in production of stainless steel. Production was up by over 16 percent in 2006 and is predicted to continue growing in 2007. The global stainless steel market accounts for about three-fourths of total nickel consumption.

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