Crude oil, base metals see prices rise

Crude oil prices were up sharply again Friday after the US government announced that it was in the process of formulating plans to remove bad debt from the books of lenders in an effort to restore confidence in the markets that will perhaps lead to gains in demand for oil and oil products, but there were warnings that prices could drop again if the initiatives do not lead to demand growth.

October contracts for West Texas Intermediate crude were up $5.63 to $103.51 per barrel near the end of floor trade on the New York Mercantile Exchange while Brent crude for November delivery added $4.49 to $99.68 per barrel on the ICE Futures Europe exchange in London.

In afternoon trade Nymex October gasoline futures added 6 cents to $2.55 per gallon while November heating oil futures had dropped 4 cents to $2.80 per gallon.

Base metals prices saw gains Friday as demand sentiment improved on the plans to deal with the fallout from the credit crisis.

December copper added 11 cents to $3.18 per pound in New York while three-month copper added $311 to $7,060 per tonne on the London Metal Exchange even though LME inventories are at a 19-month high at 209,800 tonnes and there are still questions about US demand in a climate of reduced construction activity.

Aluminium added $40 to $2,535 per tonne after hitting its lowest level in eight months on Thursday while zinc was up $42 to $1,758 per tonne, tin was around $75 higher at $16,900 per tonne, lead was up $95 to $1,900 per tonne and nickel added $150 to $16,900 per tonne.

Precious metals prices were mixed, however, with December gold down $32.90 to $864.10 per troy ounce as December silver dropped 26 cents to $12.44 per troy ounce but October platinum added $9.40 to $1,147 per troy ounce.

Grains prices were higher.

December corn on the Chicago Board of Trade was up $5.42 per bushel while CBOT December wheat added 25 cents to $7.18 per bushel and November soybeans gained 27 cents to $11.43 per bushel.

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