Oil trading solid around $78 as gold hits $1200

Crude oil prices are trading around the $78 a barrel mark on Wednesday in Asia after US crude supplies unexpectedly rose, suggesting oil demand in the US economy remains weak.

Light crude oil Futures for January delivery was flat at $78.37 at midday Singapore time in electronic trading on the NYMEX, while in London, Brent crude oil futures for January delivery gained 14 cents to $79.49 on the ICE Futures exchange.

The US spot gold price hit a new record above $1,203 per ounce on Wednesday, marking an all time high for the second straight day as weakness in the US dollar spurs buying of the precious metal as an alternative investment.

US crude inventories unexpectedly fell last week, the American Petroleum Institute said late on Tuesday, while US crude oil stocks rose 2.9 million barrels while analysts had expected a drop of 1.3 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Oil prices broke below $76 a barrel late last week after conglomerate Dubai World said it would delay interest payments on $60 billion of debt. But prices quickly recovered this week as investors were encouraged by signs of improving crude demand in Asia. Crude has traded between $75 a barrel and $82 for more than a month.

“Oil prices should continue to be rangebound.” Societe Generale said in a report. “However, there is a solid floor.”

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