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Saturday 06th of September 2008
July 26, 2006

Crude oil prices higher


by Elaine Frei

Crude oil prices were up on Wednesday after gasoline inventories in the United States were reported to have dropped more than they were expected to last week, by 3.2 million barrels. The drop was much more than the 0.2 million barrel decline that had been forecast. Crude oil inventories were unchanged, against an expected drop of 0.7 million barrels. Also helping prices higher were continuing troubles in the Middle East and in Nigeria.

At a meeting in Rome, there were calls for a “sustainable” ceasefire, but no insistence on an immediate end to hostilities, while the leader of Hizbollah’s remarks were not conciliatory. Meanwhile, an attack on an oil facility belonging to Italian company Eni resulted in decreased output, but the attack was blamed on angry locals rather than on actions by militants.

September contracts for Brent crude were $1.30 higher to $74.58 per barrel in London, while West Texas Intermediate crude for September delivery added 80 cents to $74.55 on the New York Mercantile Exchange. Nymex unleaded gasoline for August delivery was up 2 cents to $2.3050 per gallon. The increase in gasoline prices was helped not only by falling inventories but by news from Valeo Energy and ExxonMobil that maintenance work at their Texas refineries would affect output.

Base metals prices were mixed on the day, with copper and zinc higher but nickel and aluminium both seeing declines. Copper added 0.1 percent to $7,440 per tonne on strike worries and output disruptions in Chile. Zinc was up 1.2 percent to $3,197 per tonne. Meanwhile, nickel was 1.4 percent lower to $24,300 per tonne even though London Metal Exchange stockpiles dropped by another 372 tonnes, as Japan said it will sell 1,273 tonnes out of its strategic stockpiles. Aluminium was 2.2 percent lower to $2,475 per tonne, again in spite of a decline in LME stockpiles, which were down by 6,100 tonnes.

Gold was slightly lower to $6.18.40 per troy ounce. Silver, platinum, and palladium also stayed near their previous prices.

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