Oil prices eased following an advance over the past 10 days that brought oil prices to their highest level this year. Traders said prices seemed to be looking to consolidate around the low $60s a barrel level.
The recent rise in oil prices has been largely associated with the heightened tension between Iran and the west over the capture of 15 British sailors last week. However, another factor has been tighter US petroleum products markets following a number of refinery outages.
ICE Brent for May delivery fell 16 cents to $64.25 a barrel in late afternoon trade in London. The May West Texas Intermediate slipped 32 cents to $62.59 a barrel in early afternoon trade on the New York Mercantile Exchange. The benchmark WTI price has risen about 25 per cent from its low this year of just below $50 touched in late January.
This increase is overshadowed by the rise in US gasoline futures over the same period, which are up 52 per cent. April Nymex gasoline futures eased 1.5 cents to $2.0532 a gallon, after hitting an intraday peak of $2.0850 a gallon, its highest level since late August 2006.
The latest refinery disruption is at the French Fos-Lavera oil terminal where workers have voted to go on a two-week strike. This has forced some refineries to cut production.
In the US, a string of refinery glitches have affected production, contributing to a fall in US petrol stockpiles over the past six weeks. The run-up in gasoline prices comes ahead of the US summer driving season, which starts in the next two months.
Gold prices moved in tandem with the oil market, with the precious metal easing to $662.10/$662.60 a troy ounce, down more than a $1 on the day.
Copper prices nudged toward another new high for the year, before sliding in late London trade. Copper prices have been buoyed recently by forecasts of a supply deficit in the second quarter, which is the peak demand period of the year for the metal.
The three-month copper price hit a intraday high of $6,890 a tonne, before easing to $6,695 in late trade, down $150 on the day.
Rusal, Sual and Glencore completed a deal to combine their aluminium and alumina assets to become the largest aluminium producer in the world. Aluminium prices rose $29 to $2,754 a tonne.
The demand for biodiesel in Europe is behind the projected increase in rapeseed production this year. The global 2007/08 rapeseed, also known as canola, crop is likely to rise to 53.1m tonnes from 46.7m in 2006/07 due to bigger harvests in the European Union, Canada and Australia, said analyst Oil World forecasts.