Crude Oil Drops on Budget Talks Impasse: Commodities at Close

The Standard & Poor’s GSCI Spot Index of 24 raw materials fell 0.7 percent to settle at 639.09 at 3:57 p.m. in New York, led by energy.

The UBS Bloomberg CMCI index of 26 prices climbed less than 0.1 percent to 1,570.01.

CRUDE OIL

Crude oil fell for the first time in six sessions on concern that U.S. lawmakers will fail to avert a fiscal crisis after House Republican leaders canceled a planned vote on higher taxes for top earners.

Prices retreated after House Speaker John Boehner scrapped a plan yesterday to allow higher tax rates on annual income above $1 million, yielding to anti-tax resistance within his own party. Spending cuts and tax increases totaling more than $600 billion a year are set to start in the U.S. in January unless an agreement is reached.

On the New York Mercantile Exchange, oil futures for January delivery slumped 1.6 percent to $88.66 a barrel, the first drop since Dec. 13.

Brent oil for February settlement declined 1.1 percent to $108.97 a barrel on the London-based ICE Futures Europe exchange.

Total SA bought a cargo of North Sea Forties crude for less than a deal yesterday. Vitol Group failed to sell two lots of Russian Urals grade.

PT Pertamina, Indonesia’s state-owned oil company, is seeking to buy low-sulfur crude for delivery during March to its Balikpapan and Cilacap refineries, according to a document obtained by Bloomberg News.

OIL PRODUCTS

Gasoline dropped as U.S. legislators delayed a vote on budget issues until after Christmas, fueling concerns that the world’s largest economy will face automatic spending cuts and tax increases in January.

On the Nymex, gasoline futures for January delivery fell 0.7 percent to $2.7347 a gallon.

Heating-oil futures for January delivery tumbled 1.1 percent to $3.0224 a gallon.

NATURAL GAS

Natural gas slid in New York for the second time in three days on speculation that temperatures won’t be low enough to erase a surplus of the fuel in storage.

On the Nymex, gas futures for January delivery dropped 0.3 percent to $3.451 per million British thermal units.

U.K. gas for the next working day declined for a third session as forecasts for higher-than-average temperatures damped demand for the heating fuel.

Gas fell 2.1 pence to 64.1 pence a therm at 3:50 p.m. London time. The month-ahead contract dropped 0.6 percent to 66.25 pence a therm. That’s equivalent to $10.73 per million Btu.

BASE METALS

Copper rose in New York, marking the biggest gain in almost two weeks, on signs of improved demand in China, the world’s biggest user of the metal.

On the Comex in New York, copper futures for March delivery added 0.9 percent to $3.567 a pound, the biggest advance since Dec. 10.

On the London Metal Exchange, copper for delivery in three months gained 0.8 percent to $7,831 a ton ($3.55 a pound). Aluminum and zinc rose in London. Tin, lead and nickel dropped.

PRECIOUS METALS

Gold increased for the first time in four days as an impasse in U.S. budget talks boosted demand for the metal as an investment haven.

On the Comex, gold futures for February delivery advanced 0.9 percent to $1,660.10 an ounce. The price dropped 3.1 percent in the previous three days on speculation that better U.S. economic data will ease pressure on the Federal Reserve to expand monetary stimulus.

Silver futures for March delivery rose 1.8 percent to $30.203 an ounce.

On the Nymex, platinum futures for January delivery dropped 0.6 percent to $1,536.90 an ounce, the fifth straight decline.

Palladium futures for March delivery added 0.3 percent to $682.30 an ounce.

SOFT COMMODITIES

Cocoa futures fell to the lowest in almost five months on signs of increasing supplies from Ivory Coast, the world’s top producer.

On ICE Futures U.S. in New York, cocoa for March delivery dropped 0.7 percent to $2,312 a ton.

Orange-juice futures for March delivery tumbled 2.8 percent to $1.3425 a pound, extending this year’s slide to 21 percent.

Arabica-coffee futures for March delivery gained 2.6 percent to $1.466 a pound.

Cotton futures for March delivery advanced 0.5 percent to 76.18 cents a pound.

Raw-sugar futures for March delivery closed unchanged at 19.25 cents a pound.

GRAINS, OILSEEDS

Soybeans rose from a one-month low on speculation that dry, warm weather in parts of Brazil will reduce yield potential, increasing demand for U.S. supplies.

On the Chicago Board of Trade, soybean futures for March delivery climbed 1.7 percent to $14.2925 a bushel. The most- active contract yesterday touched $13.9775, the lowest since Nov. 20.

Corn futures for March delivery advanced 0.8 percent to $7.02 a bushel in Chicago. Still, the contract fell 3.9 percent this week, the third straight decline.

Wheat futures for March delivery gained 0.2 percent to settle at $7.92 a bushel.

LIVESTOCK

Cattle rose, erasing earlier losses, after a U.S. government report showed feedlots bought fewer cattle in November compared with a year earlier as dry weather reduces the amount of feed available.

On the Chicago Mercantile Exchange, cattle futures for February delivery rose 0.1 percent to $1.33575 a pound. Prices are up 10 percent this year as the U.S. herd shrunk.

Feeder-cattle futures for March settlement fell less than 0.1 percent to $1.54775 a pound.

Hog futures for February settlement gained 0.5 percent to 86.9 cents a pound.

To contact the reporter on this story: Thomas Galatola in New York at tgalatola@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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