LONDON (ShareCast) - Oil prices rose over $4 Wednesday after an Energy Department report revealed gasoline supplies fell last week, indicating demand is still high.

Stockpiles dropped 3.5m barrels against predictions of a 400,000 barrel increase. Crude inventories slipped 100,000 barrels.

The September futures contract topped $127 a barrel at one stage in New York, before settling with a $4.58 gain at $126.77 a barrel on the New York Mercantile Exchange.

A forecast from Goldman Sachs also helped fuel oil’s rise after it said that said crude could reach $149 a barrel by the end of 2008.

Focus also shifted back to tensions in the Middle East and Nigeria after Royal Dutch Shell said that it will fall short of a significant part of its Nigerian oil exports over the next two months following more militant attacks on oil pipelines.

Gold for August delivery closed down $13.60 at $902.90 an ounce on the New York Mercantile Exchange as the dollar gained against major currencies.

The yellow metal had fallen to a low of $895.20 earlier in the session but as the dollar as the dollar trimmed some of its gains, gold buying resumed.

September silver futures rose 9 cents to settle at $17.465 an ounce while September palladium fell $7.65 to close at $375.70 an ounce.

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