Oil, gold prices rally further

LONDON (AFP) - Oil and gold prices extended their recent rallies this week as investors scooped up commodities on signs of a pick-up in a global economy that has suffered its worst downturn in decades.
OIL: Oil prices jumped to six-month highs above 62 dollars a barrel in New York this week, lifted by rising stock markets, a sliding dollar and news of falling energy inventories in the United States, dealers said.
As the week drew to a close, attention switched to a meeting of the OPEC cartel to take place on Thursday.
New York crude reached 62.26 dollars on Wednesday — the highest level since mid-November — after data showed a fall in oil inventories in the United States, the world’s biggest energy-consuming country.
US crude reserves tumbled 2.1 million barrels in the week ending May 15, far more than market expectations for a drop of 700,000 barrels.
“The bullish (positive) sign is that we’ve seen two consecutive weeks of falling inventories in the US,” Tony Nunan, an energy risk manager at Mitsubishi Corp, said on Friday.
Oil also won support from a weak greenback which makes dollar-priced crude cheaper for buyers holding stronger currencies — and therefore tends to stimulate demand for the commodity. The euro on Friday rose above 1.40 dollars for the first time since the start of the year owing to concerns about high US debt, dealers said.
In afternoon London trade, the European single currency hit 1.4005 dollars — the highest level since January 2.
The dollar’s decline has accelerated since Thursday “after speculation increased that the US could potentially face a credit rating downgrade,” said Lee Hardman, currency analyst at The Bank of Tokyo-Mitsubishi UFJ in London. While there was no specific news about the US sovereign rating, a warning by Standard & Poor’s on Thursday of a possible downgrade of Britain’s rating prompted fears the United States might be next, dealers said.
Next Thursday meanwhile, OPEC holds a meeting in Vienna to discuss whether to alter the amount of crude the cartel is pumping.
The Organization of Petroleum Exporting Countries, which produces some 40 percent of global supply, has steadily cut output since late last year in a bid to steady prices which have tumbled from record highs above 147 dollars a barrel reached last July.
Libya’s envoy to OPEC, Shukri Ghanem, told AFP on Thursday that the meeting’s outcome remained uncertain as member nations had yet to indicate a clear stance.