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Commodities: Oil and gold down again

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Date: Thursday 01 May 2008

LONDON (ShareCast) - Oil and gold prices fell again on Wednesday after a widely expected US interest rate cut and after a weekly government report showed a bigger than expected rise in crude supplies.

US light crude oil for June delivery fell $2.17 to settle at $113.46 a barrel on the New York Mercantile Exchange.

US crude inventories rose 3.8m barrels to 319.9m barrels in the week ending April 25, according to data from the US Energy Information Administration. Analysts had expected a weekly increase of around 1.6m barrels.

The report also showed gasoline supplies fell by 1.5m barrels while distillate stocks, which include diesel and heating oil, rose by 1.1m barrels. Analysts had pencilled in an increase of 150,000 barrels in distillates and an 800,000 drop in gasoline stockpiles.

Among precious metals COMEX gold for June delivery fell $11.70 to settle at $865.10 an ounce. The yellow metal tracked the decline in oil prices.

Comments from the Fed that the economic outlook was stronger than previously thought also helped to wipe away gold demand.

Silver for July was down 5 cents to $16.59.