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Commodities: Oil rises to nearly $123 a barrel

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Date: Wednesday 07 May 2008

LONDON (ShareCast) - Oil futures powered to a new record high of nearly $123 a barrel Tuesday, as investors continued to scoop up the commodity on predictions of continued surging prices and concern about tight supplies.

A Goldman Sachs report spurred buying after it predicted that oil prices could rise to $150 to $200 within two years.

A drop in the dollar and diminishing production from Mexico and Russia also affected oil sentiment.

However an analyst from Citigroup predicted that crude prices could fall to $40 a barrel because supplies are comfortable.

Crude for June delivery surged to a new record of $122.73 a barrel before easing back to $121.84 on the New York Mercantile Exchange, up $1.87.

Among precious metals gold ended the day slightly up at about $877 an ounce as it tracked rising oil prices.

A weaker dollar also helped gold buying. Gold for June delivery closed up $3.60 at $877.70 an ounce on the New York Mercantile Exchange.

July silver rose 3 cents to settle at $16.86 an ounce while July platinum added $42.40 to end at $1,969.80 an ounce. June palladium rose $6.95 to close at $431.40 an ounce.