Oil crept closer on Monday to the records hit three months ago, as speculators ignored news of improving supply conditions and focused instead on demand growth.
Traders on the New York Mercantile Exchange were on holiday until Wednesday, but IPE Brent crude for August delivery gained 40 cents to $73.91 a barrel in late afternoon trade in London, having fallen just one cent short of touching the $74 mark. Brent touched a record of $74.97 on May 3.
Nymex West Texas Intermediate ended on Friday at $73.85 a barrel. This compares with its record high of $75.35 a barrel touched in May.
Oil prices were lifted by expectations that US drivers would take to the roads in force during the Independence Day break. The rise in oil prices comes at a time when oil inventories in developed countries are at their highest level in 20 years, a sign that there is no shortage of oil.
However, traders are more concerned about the availability of refined products, particularly for petrol and diesel, where inventories are at the mid-range of a long term average.
The latest data from the Commodity Futures Trading Commission show a substantial increase in net long positions, a bet that prices will rise further, in both crude oil and petroleum products. The combined net long position, however, is about 73,000 contracts, or about half of the recent peak of 138,000 contracts seen at the beginning of May, according to Barclays Capital.
Gold added about $12 or two per cent in thin trading to $624/$625.00 a troy ounce from its late close on Friday. Bullion touched a four week high of $625.05 earlier in the session. The metal has risen 15 per cent in the past two weeks as commodity prices across the board recover from the sector sell-off in May.
The gold market continues to be buoyed by speculation that the central banks of China and the United Arab Emirates are looking at increasing their gold reserves, although there is no clear evidence of central bank buying this year.
Silver reached a three week high of $11.27 a troy ounce, and platinum touched a four-week peak of $1,242 a troy ounce.
However, the upward move in precious metals did not extent to base metals. The three-month copper contract fell $80 to $7,240 a tonne on the London Metal Exchange. Aluminium was $30 lower at $2,600 a tonne.
Nickel went against the falling trend in base metals, rising $450 to $21,800 a tonne.
UBS said inventories of nickel stored in LME warehouses yesterday fell below the 10,000 tonnes level, down from its peak of 37,000 tonnes this year. Taking into account metal on cancelled warrant - the metal that is already earmarked to be shipped to customers - the stocks level is about 7,000 tonnes.
