Commodities Commodities Round up: Crude rises 4%

Date: Thursday 27 May 2010

Crude oil prices surged 4% on Wednesday as traders cheered encouraging economic data and a report showing a decline in gasoline supplies.

Crude for July delivery advanced $2.76 to $71.51 a barrel on the New York Mercantile Exchange.

Data from the US Energy Information Administration showed gasoline supplies fell by 200,000 barrels last week. Distillates, used in diesel and heating oil, declined by 300,000 barrels.

However investors largely overlooked data that showed crude stocks increased by 2.4m barrels last week, topping analyst forecasts of a 100,000 barrel rise.

The EIA report also showed a rise in demand for gasoline and other oil products.

Risk appetite increased as most stocks markets across the globe advanced, although Wall Street finished below 10,000 for the first time in three months.

Investors mulled data from the Commerce Department which showed new homes sales rose a bigger than expected 14.8% in April to a seasonally adjusted rate of 504,000, up from 439,000 the month before.

A separate report said durable-goods orders rose a better than forecast 2.9% in April.

Gold continued its ascent on Wednesday as traders continued to seek safety in the precious metal. Comex gold for August delivery settled up $15.50 at $1215.3 after trading at a low of $1202.70 and a high of $1218.70an ounce.

Nerves about European debt, global growth, the weak euro and military tensions in the Korean peninsular ensured a third day of gains for bullion.