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Daily Telegraph: Nerves send oil and metals to new highs

By Roland Gribben (Filed: 04/04/2006)
A new round of increases in the cost of petrol and other petroleum products is closer after oil prices hit a new peak.
North Sea Brent oil for delivery next month topped the previous peak of $67.48 a barrel to finish up $1.59 at $67.50 in a market unnerved by events in Nigeria and Iran and increased demand from American refiners in the run-up to the start of the “gasoline season”.
There was equally feverish activity in commodities with copper and zinc prices setting records while gold, the sanctuary in volatile markets, reached a 25-year peak of $590.30 an ounce, up $6.15. Silver also benefited from a flow of institutional money, climbing 20c to $11.71 an ounce.
The continued loss of more than 20pc of Nigerian production as a result of rebel attacks is continuing to tighten the oil market as traders prepare for the upsurge in petrol demand in America, which accounts for 40pc of world sales.
Further rises that could take oil above $70 a barrel could see the International Energy Agency, the consumers 'cartel', releasing supplies of crude from strategic stocks, say analysts.
Nigerian ministers are making optimistic noises about restarting shut-in production but Shell, the biggest operator, is more cautious because of the risk to employees.
Oil hawk Hugo Chavez, Venezuelan president, is adding to market unease. He told the BBC he plans to ask fellow members of Opec at their June 1 meeting to set $50, last year's average price, as a long-term objective.
The move is seen as an attempt to keep the development of Venezuela's large reserves of heavy crude oil economic. Venezuela has increased its grip on domestic production with the takeover of fields operated by Total of France and Eni of Italy after failing to agree new terms.
Events in Iran are also preoccupying traders but Iranian officials are insisting they would not use oil as a weapon to counter any UN sanctions over the country's nuclear programme.

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