21.07.2008 11:17

COMMODITIES: weekly review

Crude oil fell for a fourth day of the last week, capping the biggest weekly decline in more than three years, as the Bush administration's decision to participate in nuclear talks with Iran eased concern of a possible military conflict. A slowing global economy, faltering U.S. fuel demand and rising supplies helped push futures to their biggest weekly dollar decline ever. Prices tumbled 11% last week on reduced tension between the U.S. and Iran, which holds the world's second- largest oil reserves.

Iran has said it may blockade the Strait of Hormuz, the shipping lane for a fifth of the world's crude, if its nuclear facilities are attacked. The country is the second-biggest producer in the Organization of Petroleum Exporting Countries.
U.S. fuel consumption fell 3% in the first half of 2008, the biggest decline for the period in 17 years, as high prices and a slowing economy curbed demand, the American Petroleum Institute said.

Crude oil for August delivery fell 10.6% to $128.88 a barrel, the lowest close since June 5. Futures reached a record of $147.27 on July 11 and have risen 72% from a year ago. Last week's decline was the biggest in percentage terms since December 2004, when heating demand in the U.S. Northeast eased because of mild weather. Oil closed at $42.54 a barrel that week, less than a third of today's settlement price. The $16.20 a-barrel decline was the biggest weekly drop in dollar terms since the futures began trading in 1983. Brent crude oil for September settlement fell to $130.19 a barrel, the lowest close since June 5. Prices climbed to a record $147.50 on July 11.

Gold fell after rallying shares reduced demand for the precious metal as an alternative investment. Silver also declined. Gold futures fell to $958 an ounce. Earlier, the most-active contract touched $950.20, the lowest price in a week. Silver futures for September delivery fell to $18.20 an ounce. The metal still has gained 22% this year, while gold climbed 14%.

Copper declined, heading for a second straight weekly drop, as supplies rose in China, the world's largest consumer of the metal. Stockpiles monitored by the Shanghai Futures Exchange gained 13% this week to 42,935 metric tons. That's the highest level since May 29. Chinese production in the six months through June rose 19% from a year earlier, the country's statistics bureau said today. Copper fell 5.3% the week before. On the London Metal Exchange, copper dropped to $8,085 a metric ton. A close at that price would mark a decline of 2.1% this week. Copper has more than quadrupled in the past five years as mining companies, hampered by strikes and falling ore grades, struggled to keep up with demand from China, India and other emerging economies.