Crude prices up on Middle East worries

Crude oil prices rose sharply Wednesday after Israeli Prime Minister Ehud Olmert announced that he will resign effective in September, raising concerns that his successor could be more inclined to attack Iranian nuclear facilities.

September contracts for West Texas Intermediate ended the floor trade session on the New York Mercantile Exchange up $4.55 to $126.73 per barrel while Brent crude added $4.70 to $127.41 per barrel on the ICE Futures Europe exchange in London.

There had been gains in prices already before the announcement, after the US Energy Information Administration reported that gasoline inventories declined by 3.5 million barrels in the week ending 25 July against an expected rise of almost half a million barrels, while crude oil stockpiles dropped by 100,000 barrels, less than expected, and distillates in storage added 2.4 million barrels in the week.

Copper prices were higher Wednesday after Grupo Mexico said it hasn’t yet decided when to open one of its mines that has been closed for a year due to a strike.

September copper added 6 cents to $3.65 per pound in New York, while three-month copper on the London Metal Exchange gained $104 to $8,035 per tonne on the session.

Precious metals were mixed, with September silver up 8 cents to $17.45 per troy ounce even as December gold fell $14.10 to $912.30 per troy ounce and October platinum dropped $7.30 to $1,738.10 per troy ounce.

Grains prices were once again mixed on the Chicago Board of Trade as December corn added 6 cents to $6.20 per bushel and November soybeans gained 15 cents to $14.06 per bushel but September wheat dropped 4 cents to $7.87 per bushel.

Corn’s gains came as the US Secretary of Agriculture said that farmers will be assessed a penalty for withdrawing from a land-conservation program before September 2009, while wheat prices declined on projections that inventories will grow.

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