AFP Business News

LONDON (AFP) - World oil prices rose back above 80 dollars on Wednesday as investors turned their attention to an upcoming US energy inventory report.

New York's main contract, light sweet crude for delivery in December rose 57 cents to 80.17 dollars a barrel.

Brent North Sea crude for December delivery climbed 39 cents to 78.50 dollars in London trade.

Purvin and Gertz analyst Victor Shum said crude prices were unlikely to hold above the 80 dollars level owing to investor concerns about weak energy demand amid mixed signals on the state of the global economy.

"When oil gets close to the 80-dollar level and the market tends to focus more on the high inventories of crude oil and fuel globally, it is difficult to surge through 80 dollars and sustain above the 80-dollar level," Shum said.

Crude reserves in the United States -- the world's biggest energy consuming nation -- are set to have risen by 1.4 million barrels in the past week, according to analysts' consensus forecast reported by Dow Jones Newswires.

The US Department of Energy releases its widely monitored inventory report later Wednesday.

Gasoline (petroleum) stocks are seen falling 100,000 barrels while distillates, which include diesel and heating oil, are tipped to have declined by one million barrels.

Oil prices had already leapt on Tuesday as commodities gained a boost from gold futures, which have struck a series of record highs.

The price of gold leapt to a record peak of 1,095.40 dollars an ounce on Wednesday in the wake of the International Monetary Fund's massive sale of the precious metal to India.

Gold already reached a record high of 1,087.80 dollars on Tuesday as the IMF said it had sold 200 tonnes of gold to India's central bank over a two-week period last month for 6.7 billion dollars to bolster its finances.

After spiking to a new high Wednesday, gold pulled back to 1,091.75 dollars in London trading.

Gold and other commodity prices have surged in recent months amid a move away from the dollar, which has been slumping. The move accelerated last month on a report that Gulf states may stop using the greenback for oil trading.

The metal is also winning support from fears over a possible spike in inflation, as gold is regarded by investors as a safe store of value.