Oil Passes $75 a Barrel, Then Falls Back

Oil Prices Touch $75 a Barrel, While Gold Notches Gains and Copper Falls

NEW YORK (AP) -- A barrel of crude oil tipped over $75 a barrel to an 11-month high on Tuesday, then gave up its gains as some traders took profits and gasoline futures fell back.
Relatively robust energy prices and a weak dollar helped float gold higher.

Oil prices that had already risen recently on world political concerns and U.S. supply questions rose further Tuesday, moving as high as $75.35 amid speculative buying, analysts said. Crude is at its highest levels since August 2006.

"I think it was too much too soon," said Phil Flynn of Chicago's Alaron Trading Corp. He said some traders may be pocketing profits ahead of the closely watched weekly petroleum inventories report, which is due out Wednesday from the Energy Information Administration.

Analysts expect to see an increase in refinery usage in this week's inventory report, according to a poll by Dow Jones Newswires. That would lead to a draw on crude stocks and a rise in gasoline output.

Light, sweet crude for August delivery was quoted at $73.77, down 38 cents in midday trading on the New York Mercantile Exchange but fluctuating between gains and losses. Gasoline futures edged down 3.02 cents to $2.096 a gallon. August heating oil fell a fraction of a cent to $2.05 a gallon.

Elsewhere, gold made gains as the U.S. dollar slipped against the euro, yen and other world currencies. Gold often moves opposite the dollar, as investors seek safer havens in which to invest their money. August gold added $1.10 to $667.40 an ounce on the New York Mercantile Exchange.

Silver rose 4 cents to $13.105 an ounce on Nymex.

Copper prices lost ground as some strike action seemed to dissipate, and the London Metal Exchange posted a second day of inventory injections. Nymex copper for September delivery fell 1.55 cents to $3.5465 a pound.

Nickel prices also weakened, while lead, zinc and tin prices ticked higher.

"No immediate end is in sight to nickels downward price spiral and further weakness is signaled by the poor state of stainless steel markets," UBS analyst Robin Bhar wrote in a report.

The Federal Reserve reported Tuesday that U.S. factories, mines and utilities increased output by the largest margin since February. The 0.5 percent rise met expectations and was evidence that the nation's manufacturing industry is ramping up production after sharp cutbacks last winter.

In Chicago, corn and soybeans retreated further after a Monday that saw futures for both slide to the daily limit of 20 cents and 50 cents, respectively. Rains crossed the U.S. Midwest and were expected to shower the corn crop with the moisture needed during its crucial pollination period.

December corn shed 6 cents to $3.425 a bushel, while November soybeans dipped 2.24 to $8.965 a bushel.

Wheat prices jumped on strong export demand, said DTN analyst Gary Wilhelmi. September wheat rose 15.75 cents to $6.17 a bushel.

Lauren Villagran, AP Business Writer