Talal Abu-Ghazaleh Capital Services (TAG Capital) | Oil, Gold Fall a Second Day as U.S. Fuel Consumption Slows

Oil, Gold Fall a Second Day as U.S. Fuel Consumption Slows

06 Nov 2008

Nov. 6 (Bloomberg) -- Crude oil, gold and copper fell on signs demand for fuel and commodities will be eroded as the global economy slumps. Gasoline supplies in the U.S., the world's largest energy user, unexpectedly rose 1.12 million barrels to 196.1 million barrels last week, an Energy Department report showed. The worst financial crisis since the Great Depression has curbed demand from builders and carmakers, damped prices and led to a 13 percent decline in the Reuters/Jefferies CRB Index of 19 raw materials in the past month. ``Even a weaker oil price has not restored demand,'' said Tetsu Emori, a fund manager with Asthma Ltd. in Tokyo, Japan's biggest commodities asset manager. ``That's why the inventories have accumulated.'' Crude oil for December delivery declined as much as $1.02 cents, or 1.6 percent, to $64.28 a barrel on the New York Mercantile Exchange. It was at $64.30 a barrel at 3:32 p.m. Singapore time. Prices, which have tumbled 56 percent since reaching a record $147.27 on July 11, are down 33 percent from a year ago. Yesterday, futures plunged 7.4 percent, the biggest drop since Oct. 10. Bullion for immediate delivery was down 0.4 percent at $737.65 an ounce at 1:55 p.m. in Singapore. Silver for immediate delivery fell 0.4 percent to $10.28 an ounce. London Metal Exchange copper for three-month delivery declined 2.2 percent to $3,980 a ton after losing 5.4 percent yesterday. Companies in the U.S. cut an estimated 157,000 jobs in October, the most in almost six years, a private report based on payroll data showed yesterday. The drop was larger than forecast and followed a revised 26,000 decline in September that was bigger than previously estimated, ADP Employer Services said. U.S. distillate inventories rose 1.21 million barrels to 127.8 million barrels last week. Analysts forecast that supplies would increase by 1.55 million barrels. Crude oil stockpiles climbed 54,000 barrels to 311.9 million barrels in the week ended Oct. 31, the department said. A 1 million-barrel gain was forecast. Imports dropped 365,000 barrels to 9.97 million barrels a day.