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Commodities: Oil rises after inventories data

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Date: Thursday 03 Apr 2008

LONDON (ShareCast) - Oil prices rose on Wednesday, following the previous day’s losses after weekly inventories data came in higher than expected.

Crude for May delivery rose $3.85 to settle at $104.83 a barrel, shrugging off the previous day’s 60 cent decline to $100.98 a barrel.

The US Energy Information Administration’s weekly report said US crude inventories rose 7.4m barrels to 319.2m barrels in the week ended 28 March. Most analysts had predicted a rise of 2.8m barrels.

The report also showed demand for distillate supplies, which include heating oil and diesel, has averaged 4.2m barrels per day, 3.1% lower than the same time a year earlier. Oil and gold prices were also boosted by a declining dollar.

Among precious metals gold recovered from previous losses with gold for June delivery up $12.4 at $900.2 on the New York Mercantile Exchange.

Fed chairman Ben Bernanke’s comments that the US economy may contract in the first half of 2008 fuelled concern about a recession.

In his speech to Congress Bernanke said the outlook for US economic growth has deteriorated since January and that the chances of hitting a recession cannot be ruled out.

Elsewhere in precious metals silver for May delivery rose 29 cents to $17.18 an ounce, while June palladium fell $4.85 to $443.75 an ounce. July platinum rose $26.80 to $1,964.60 an ounce and copper for May added 81 cents to $3.88.