Thursday, February 21, 2008

Oil, gold prices strike historic highs

The price of oil touched an all-time peak of 101.32 dollars a barrel on Thursday, lifted by fears of supply disruptions according to traders.

Oil's surge meanwhile helped gold to a record high of 948.59 dollars an ounce, they added.

Gold was in demand from investors seeking a haven for their cash amid concerns about rising inflation amid surging oil prices.

The price of New York crude for delivery in March later settled back to 101 dollars in electronic trading while gold stood at 945.63 dollars on the London Bullion Market.

"Oil prices are being supported by lingering worries about oil supply," said Commonwealth Bank of Australia analyst David Moore.

He added that in the near-term the oil market will be "heavily influenced" by any decision of the Organisation of Petroleum Exporting Countries on output levels at its next meeting on March 5.

OPEC ministers kept the official daily output ceiling at 29.67 million barrels of oil at an emergency meeting on February 1, resisting calls from US President George W. Bush to increase supplies to help bring down prices.

But the market is rife with speculation that OPEC, which supplies about 40 percent of the world's oil, would keep steady or even decide to cut production.

As for gold, James Moore of TheBullionDesk.com said the precious metal "looks set to extend higher in the coming sessions as investors seek assets to offset rising inflation".

"The metal should now look to challenge 950 dollars, with 1,000 dollars an ounce still a realistic target this quarter," he added.

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