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Commodities: Crude cools after surge

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Date: Monday 17 Mar 2008

LONDON (ShareCast) - Oil prices surged to a new record high Friday before dropping back later on to finish lower for the first time in five sessions.

US light crude for April delivery slipped 12 cents to close at $110.21 a barrel on the New York Mercantile Exchange, although the contract had hit $112.75 earlier on dollar weakness.

Traders blamed the pullback on profit taking after data revealed that the University of Michigan consumer confidence index fell to 70.5 in March from 70.8 the month before.

Meanwhile, a tame report on US inflation left the dollar struggling, with consumer prices unchanged in February, raising the prospect of further heavy cuts in interest rates.

On the metal markets, gold was better again, surging above $1,000, as investors booked a flight to safety following news of the bail out at investment bank Bear Stearns.

Gold for April delivery jumped $5.70 to end the day $999.50 an ounce in New York, although prices had hit a best ever $1,009 earlier in the session.

The market is now wondering who will be next after JP Morgan Chase and the New York Federal Reserve agreed emergency short-term funding for the beleaguered Bear Stearns.

Elsewhere, silver improved, palladium and platinum both fell, while copper held its ground, closing unchanged.