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Date: Friday 18 Jul 2008

LONDON (ShareCast) - The benchmark oil future contract closed below $130 a barrel, hitting its lowest level since 5 June, as oil prices fell for the third day in succession.

Oil for August delivery fell $5.31 to close at $129.29, after hitting an intra-day high of $136.75 at one point on the back of a weak dollar. Concerns over reduced demand from a struggling US economy reasserted themselves, causing the morning’s gains to evaporate.

The unexpected surge in supplies announced on Wednesday was still weighing on sentiment. US crude inventories rose by 3 million barrels in the week ended 11 July to 296.9 million, according to the Energy Information Administration. Experts had been expecting stockpiles would fall by between 2 and 3 million barrels.

Gold futures finished the regular trading session in the pink, only for all of the day’s gains – and more – to be surrendered in after-hours trading as the yellow metal slumped in line with the price of oil and other commodities.

Gold for August delivery rose $8 to close at $970.70 on the New York Metal Exchange in regular trading.

Early strength in the price of gold was founded on a weak dollar and firmer oil prices, but both trends reversed in the afternoon.

Silver, platinum and palladium prices also fell back but copper rose 6 cents to $3.71 an ounce.

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