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Commodities: Oil inches closer to $120

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Date: Tuesday 29 Apr 2008

LONDON (ShareCast) - Supply jitters following a two-day strike at the Grangemouth refinery in Scotland sent crude oil to a new high of $119.93 on Monday.

Prices later settled lower with US light crude oil for June delivery up 23 cents at $118.75 a barrel on the New York Mercantile Exchange.

More rebel attacks on Shell’s pipelines in Nigeria on Monday and tensions in the Persian Gulf have also fuelled concern about tight oil supplies. The Scottish refinery is expected to be back up and running by next week.

Meanwhile expectations that the Federal Reserve will cut rates again later this week also ramped up oil prices. Lower interest rates traditionally increase inflation, weakens the dollar and boosts oil prices.

Among precious metals COMEX gold for June delivery rose $5.80 to settle at $895.50 an ounce despite a stronger dollar.

Silver for July was up 17 cents to $17.12 while platinum advanced $10.60 to $1978.60.