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Sunday 07th of September 2008
May 30, 2006

Oil prices rise on demand growth in China


by Elaine Frei

Prices for crude oil and precious metals were up on Tuesday, while base metals prices saw declines despite lower inventories in some commodities.

New data showed that oil demand in China grew at its quickest rate in two years in April as estimated consumption was up 10.8 percent year-on-year following an increase in fuel prices that had been meant to encourage Chinese refiners to send more of their supplies to the domestic market. Other news affecting oil prices included the decision by the Organization of Oil Exporting Countries during a meeting in Venezuela to hold production by its members to its current level of 28 million barrels per day and a US push to convince Europe and Japan to institute financial sanctions against Iran to convince that nation to halt its uranium enrichment program.

The price for Brent crude July contracts was up 84 cents to $71.43 per barrel on the International Petroleum Exchange. Meanwhile, July delivery West Texas Intermediate crude was up 98 cents to $72.35 per barrel on the New York Mercantile Exchange.

Gold prices were aided by continuing weakness in the US dollar, adding 1.2 percent to $657.70 per troy ounce. Silver was up 3.2 percent to $13.16 per troy ounce, while platinum was slightly to $1,296 per troy ounce. Palladium was also up slightly to $355 per troy ounce.

Copper dropped 2.8 percent to $8,000 per tonne as rumors spread that China will auction 20,000 to perhaps as much as 100,000 tonnes of copper later in the week in Shangai in its first copper sale of the year by the Asian nation’s State Reserve Bureau.

Nickel dropped 6.1 percent to $21,600 per tonne after Inco reached a provisional agreement with the United Steelworkers on Monday, averting a threatened strike at its Sudbury facility. Strike worries had sent nickel prices up to $23,000 on Friday.

Zinc prices fell 1.5 percent to $2,715 per tonne even though London Metal Exchange zinc inventories were down by 1,350 tonnes.

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