Crude Oil, Gold Slump on Europe Woes: Commodities at the Close

The Standard & Poor’s GSCI gauge of 24 commodities fell 1.2 percent to close at 645.44 at 3:45 p.m., the first decline since Dec. 16.

The UBS Bloomberg CMCI index of 26 raw materials fell to 1,513.572 at 4:19 p.m.

CRUDE OIL

Crude oil declined for the first time in seven days as a surge in the European Central Bank’s balance sheet to a record highlighted the growing risks of the region’s debt crisis and threatening fuel demand.

Futures dropped 2 percent after the ECB lent financial institutions more money last week in an attempt to keep credit flowing. The euro tumbled to the lowest level since January against the dollar, curbing investor demand for commodities. Oil also decreased on reduced concern that Iran will block the Strait of Hormuz.

Crude oil for February delivery fell $1.98 to $99.36 a barrel on the New York Mercantile Exchange, the lowest settlement since Dec. 21. It was the biggest decline since Dec. 14. Futures have climbed 8.7 percent this year, extending last year’s advance of 15 percent.

Brent oil for February settlement fell $1.71, or 1.6 percent, to end the session at $107.56 a barrel on the London- based ICE Futures Europe exchange. The European contract’s premium to New York crude was $8.20 a barrel at today’s close, up from $7.93 yesterday, the smallest spread since Jan. 20.

OIL PRODUCTS

Gasoline futures fell for the first time in seven sessions on speculation that demand for the motor fuel won’t improve.

Futures declined as consumption in the four weeks ended Dec. 16, measured by deliveries to wholesalers, was 4.7 percent below a year earlier, Energy Department data show. Retail gasoline use through Dec. 23 was down 1.6 percent from 2010, according to MasterCard Inc.’s SpendingPulse report today. Associates LLC in Houston.

Gasoline futures for January fell 3.75 cents, or 1.4 percent, to settle at $2.6513 a gallon on the New York Mercantile Exchange. Prices are up 8.1 percent this year, after rising 41 percent through April 29.

January-delivery heating oil declined 1.51 cents, or 0.5 percent, to settle at $2.8934 a gallon. Prices are heading for a 14 percent gain in 2011.

PRECIOUS METALS

Gold fell, capping the longest slump since October 2009, and silver tumbled to a three-month low as Europe’s deepening debt crisis drove commodities and stocks lower.

The euro dropped to an 11-month low against the dollar as lending to financial institutions sent the European Central Bank’s balance sheet to a record high. The Standard & Poor’s GSCI index of 24 raw materials and the MSCI World Index of equities were poised for the biggest declines in two weeks. Platinum approached the lowest since November 2009, and palladium dropped almost 3 percent.

Gold futures for February delivery declined 2 percent to settle at $1,564.10 at 1:47 p.m. on the Comex in New York. The price dropped for the fifth straight session, the longest slide since October 2009. The commodity headed for the first quarterly slump since September 2008.

Silver futures for March delivery fell 5.2 percent to $27.234 an ounce on the Comex. The metal has plummeted 45 percent from a 31-year high of $49.845 on April 25.

Platinum futures for April delivery declined 3.2 percent to $1,392.40 an ounce on the New York Mercantile Exchange. On Dec. 15, the metal declined to $1,376, the lowest since Nov. 13, 2009.

Palladium futures for March delivery slumped 2.9 percent to $647.15 an ounce on Nymex, the biggest drop since Dec. 14.

BASE METALS

Copper fell to a one-week low as the European Central Bank’s balance sheet soared to a record, spurring concern that the region’s debt crisis will damp global growth and commodity demand.

Copper futures for March delivery fell 1.3 percent to close at $3.3655 a pound at 1:11 p.m. on the Comex in New York. The metal has slumped 24 percent this year.

Copper also fell on the London Metal Exchange. Aluminum, zinc, lead, tin and nickel declined.

NATURAL GAS

Natural gas fell for a third day in New York on speculation that mild weather last week caused a smaller-than-normal stockpile decline, spurring concern that heating demand will not be enough to erode surplus stockpiles.

The futures slipped 0.9 percent on the January contract’s last day of trading. The Energy Department may report tomorrow that natural gas in storage declined by 86 billion cubic feet in the week ended Dec. 23, according to the median of 12 estimates compiled by Bloomberg. The five-year average drop for the week is 122 billion.

Natural gas for January delivery slipped 2.8 cents to settle at $3.084 per million British thermal units on the New York Mercantile Exchange. Futures for February delivery fell 2.9 cents to $3.121. Gas has dropped 30 percent this year.

GRAINS, OILSEEDS

Corn rose, extending the longest rally in a year, on speculation that demand for U.S. supplies will increase as adverse weather reduces output in South America. Soybeans fell.

Argentina’s top corn-producing region will be dry for the next nine days with temperatures as much as 10 degrees Fahrenheit above normal in the next week, increasing stress on reproducing plants, Commodity Weather Group LLC said in a report. Yields may drop 20 percent, reducing the country’s total by 7 percent, the forecaster said. The U.S. is the world’s biggest exporter, followed by Argentina.

Corn futures for March delivery rose 1.5 percent to close at $6.425 a bushel at 1:15 p.m. on the Chicago Board of Trade. The price gained for the eighth straight session, the longest rally since late December 2010. Earlier, the grain reached $6.4625, the highest for a most-active contract since Nov. 17.

Soybean futures for March delivery fell 0.1 percent to $12.08 a bushel in Chicago. U.S. growers increased sales after the price rose in the previous eight sessions, the longest rally since mid-July. Earlier, the oilseed reached $12.19, the highest since Nov. 7.

Wheat futures for March delivery rose 1 percent to settle at $6.5125 a bushel at 1:15 p.m. on the Chicago Board of Trade. The commodity advanced for the eighth straight session, the longest rally since October 2007. Earlier, the price reached $6.56, the highest for a most-active contract since Nov. 9.

SOFT COMMODITIES

Cocoa fell the most since May on signs of rising supplies from Ivory Coast, the world’s biggest producer. Coffee climbed, while sugar dropped.

Cocoa for March delivery fell 3.7 percent to settle at $2,133 a ton at 12:01 p.m. on ICE Futures U.S. in New York, the biggest loss since May 5. The commodity has plunged 30 percent this year, poised for the biggest annual slump since 1999.

Arabica-coffee futures for March delivery climbed 1.8 percent to $2.2675 a pound in New York. The commodity is down 5.7 percent in 2011, poised for the first annual loss since 2008.

Raw sugar for March delivery fell 2 percent to 23.13 cents a pound, the biggest drop since Dec. 14. The sweetener has dropped 28 percent this year, on pace for the biggest annual decline since 1998.

In London futures trading, cocoa, robusta coffee and refined sugar fell on NYSE Liffe.

LIVESTOCK

Hog futures dropped from a two-week high on signs that U.S. demand for pork has slowed. Cattle fell.

Spot-market hogs declined to 78.54 cents a pound yesterday, the lowest since February, U.S. Department of Agriculture data show. Wholesale pork tumbled to an 11-month low last week before rebounding 0.5 percent yesterday to 86.29 cents a pound. The price headed for a third straight monthly loss.

Hog futures for February settlement fell 0.2 percent to close at 85.55 cents a pound at 1 p.m. on the Chicago Mercantile Exchange. The most-active contract has climbed 7.3 percent this year, heading for a fourth straight annual gain.

Cattle futures for February delivery fell 0.04 percent to $1.2315 a pound, the second straight drop. The commodity has climbed 14 percent this year, on pace for the third straight annual advance.

Feeder-cattle futures for March settlement rose 0.05 percent to $1.5035 a pound on the CME, after reaching a record $1.508. The price has jumped 21 percent this year as the U.S. herd shrank.

To contact the reporter on this story: Mario Parker in Chicago at mparker22@bloomberg.net

To contact the editor responsible for this story: Bill Banker at bbanker@bloomberg.net

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