Oil prices stabilize; gold holds close to record peak
LONDON — World oil prices steadied on Wednesday, while safe-haven gold held close to the previous day’s record high on the back of simmering Middle East tensions.
Brent North Sea crude for delivery in April eased six cents to $115.36 per barrel.
New York’s light sweet crude for April, known as West Texas Intermediate (WTI), gained 25 cents to $99.88 per barrel, after earlier trading above the key $100 mark.
Brent oil prices had soared last week close to $120 as tensions flared in Libya. London Brent trades at a significant premium to WTI because of high crude stockpiles in the United States.
“Clearly everyone is concerned” about turmoil in the Middle East and North Africa, said John Vautrain, vice president for Purvin and Gertz international energy consultants in Singapore.
He said investors were worried about unrest sweeping across oil producing countries and disrupting supplies.
“Markets are concerned that rising oil prices will lift inflation and hit economic growth in Asia,” research house Capital Economics said in a market commentary.
“Relative to their economies, Korea and Taiwan are the biggest net oil importers within the region but we believe India and Thailand would probably struggle most if oil prices were to remain at their current levels,” it said.
“The risk of higher inflation bringing an aggressive policy tightening is highest in India and Indonesia, where inflation is already uncomfortably high.”
Elsewhere, gold held close to record levels on Wednesday, one day after rocketing to an all-time high at $1,434.93 per ounce as many investors ought out a safe-haven.
“Gold traded to a new nominal all time high last night and continues to gain momentum as things in the Middle East continue to look messy, but just this morning there is a little profit taking,” said Capital Spreads analyst Simon Denham.
Oil prices have been soaring after popular uprisings toppled the leader of Tunisia in January, followed by long-time strongman Hosni Mubarak of Egypt in February.
Libyan leader Moamer Kadhafi is now fighting a rebellion against his four-decade-old rule, while protests are rocking other parts of the oil-rich region, including Yemen and Oman.
Clashes also took place Tuesday between protesters and security forces in Iran, the world’s fourth largest oil producer.
Western powers on Tuesday weighed whether military action was a viable option against Kadhafi as leaders of the revolt grew increasingly fearful of counter-strikes by his loyalists.
While there was support in some quarters for at least the imposition of a no-fly zone, senior US officials warned that military action to speed Kadhafi’s departure could be complicated and have potentially undesirable consequences.