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Commodities: Supply concerns fuel oil spike

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Date: Sunday 27 Apr 2008

LONDON (ShareCast) - Oil prices surged again on Friday, spiking more than $2 after reports that a US cargo ship fired at two boats in the Persian Gulf.

There is concern that conflict between the US and Iran could stop supplies coming from Iran. US light crude oil for June delivery jumped $2.46 to settle at $118.42 a barrel on the New York Mercantile Exchange.

Concern about oil supplies from Nigeria have also fuelled oil’s recent rise. There have been a series of attacks on Shell pipelines in the country. A refinery strike in Scotland added to supply concerns.

Oil rose despite a strengthening dollar and analysts’ are now predicting oil futures will rise to as much as $130 a barrel.

Among precious metals COMEX gold for June delivery rose 30 cents to settle at $889.70 an ounce after two days of consecutive losses.

Analysts said there was some caution ahead of the Federal Reserve’s decision on interest rates this week. Trepidation about a shift in dollar sentiment also hampered gold prices, analysts said.

June palladium rose $2.50 at $448.95 an ounce, May silver futures rose 19 cents to $16.85 an ounce while July platinum fell $2.70 to $1,968.