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Commodities: Gold succumbs to profit taking

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Date: Wednesday 13 Feb 2008

LONDON (ShareCast) - Predictions by industry sources that US crude oil inventories rose again last week outweighed fears over the possible escalation of the dispute between the Venezuelan government and US oil titan Exxon Mobil.

Crude oil prices fell back below $93 as industry sources estimated that oil stockpiles in the US have risen for the fifth week in succession.

Last week Exxon won court orders in three nations to freeze more than $36bn in Venezuelan assets in a dispute over the seizure of assets belonging to a joint venture. Venezuela’s president responded on Sunday by threatening to cut off Venezuela’s oil supplies to the US while on Tuesday the country’s oil minister continued the pugnacious theme, saying Venezuela is considering suing Exxon.

Meanwhile US oil company Valero said work on fixing the power failure at its Delaware refinery would continue until Thursday.

Gold futures headed south on Tuesday as profit-takers were out in force, encouraged by the thumbs-up from the G7 officials for the International Monetary Fund’s plans to reduce its gold reserves; the IMF is the world’s third largest holder of gold reserves.

Platinum futures hit a new high during the day of $1,970.90 an ounce before falling back to close $127.60 down on the day. Silver and palladium also declined while copper prices were unchanged.