Oil prices bounce above 120 dollars on US storm concerns

LONDON (AFP) - Oil jumped briefly back above 120 dollars per barrel this week before turning lower in choppy trade that was driven by US storm worries and tensions between Russia and the West, traders said.

Precious metal gold benefited from its safe-haven status as investors sought to shelter their cash amid sharp exchanges between Washington and Moscow over the Russian intervention in Georgia.

Most base metals, including aluminium, copper and tin, suffered losses on widespread concern that slowing economic growth could sap demand.

OIL: New York crude oil prices stretched as high as 120.50 dollars per barrel on Thursday as traders eyed stormy weather in the Gulf of Mexico, where many US energy facilities are located.

After breaching 120 dollars, prices closed sharply lower as traders discounted the threat of Tropical Storm Gustav.

But they moved higher again on Friday ahead of a three-day holiday weekend in the United States. About a quarter of US crude oil installations are located in the Gulf of Mexico.

“The focus is likely to remain on Tropical Storm Gustav and potential supply disruptions during the weekend and earlier next week,” said Sucden analyst Andrey Kryuchenkov.

Majors BP and Shell, and US rival ConocoPhillips on Thursday evacuated workers from their installations in the Gulf of Mexico. The threat of Gustav raised grim memories of the 2005 hurricanes Katrina and Rita that damaged or destroyed about 165 oil platforms of the some 4,000 located in the Gulf.

Oil markets this week also tracked escalating tensions between Georgia and Russia, the world’s biggest oil producer.