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Oil, gold, platinum prices strike historic highs

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today Feb 21, 2008
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LONDON, Feb 21, 2008 (AFP) - The price of oil touched an all-time peak of 101.32 dollars a barrel in trading on Thursday, lifted by fears of supply disruptions, according to analysts.

Oil's surge helped gold to a record high of 948.59 dollars an ounce and platinum to strike a historic pinnacle of 2,192.50 dollars an ounce as speculators dived into the buoyant commodity markets, they added.

Commodities prices are also soaring on strong demand for raw materials from emerging economic powers, notably China and India.

"Most likely the key reason behind this recent rally in crude futures comes amid renewed supply worries, following comments from various OPEC members that the group is unlikely to change its output when it meets in March, while some members even favour a possible cut to the group's supplies," said Sucden analyst Andrey Kryuchenkov.

"In addition, market participants remain concerned about an ongoing row between Exxon Mobil and Venezuela, with the Latin American (oil) exporter threatening to cut more supplies to the US.

"Also, crude futures are tracking gains in other raw materials, with a broad rally in most commodities, with base and precious metals and agriculturals all holding firm," added Kryuchenkov.

After spiking to a record high price above 101 dollars, New York's main contract, light sweet crude for delivery in April, settled back to 99.35 dollars a barrel, down 35 cents from Wednesday's close.

The March contract had expired on Wednesday, at an all-time closing high for New York crude of 100.74 dollars.

On Thursday, Brent North Sea crude for April delivery fell 52 cents to 97.90 dollars a barrel. It had struck a record high of 99.22 dollars on Wednesday.

Among other commodities, gold was in high demand from investors seeking a haven for their cash amid concerns about rising inflation amid surging oil prices.

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".

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

Platinum's rally on Thursday comes also because of a tight supply situation for the white metal that is used to produce expensive jewellery and catalytic converters in vehicles.

South Africa, which produces about 75 percent of the world's platinum, is in the grips of a power crisis that has badly hit the country's mining industry.

"Currently, commodities are outperforming other assets, as equities and credit or money derivative products are suffering from persistent concerns over the state of the US economy," said Sucden's Kryuchenkov.

"Investors worry that a potential recession in the US could spread into the broader market and dent global growth. However, robust gains in commodity markets have been largely attributed to emerging market economies and especially robust demand from such giants like China and India," he added.

Also on Thursday, the price of silver hit the highest level for 27 years, at 18.04 dollars an ounce and palladium struck 525.5 dollars an ounce -- the steepest point since 2001.

"Silver mirrored the move in gold ... hitting a new multi-decade high," noted UBS analyst John Reade.

by Ben Perry

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