LONDON, Aug 16: Most commodity prices fell sharply this week, with gold under 800 dollars per ounce and crude oil slumping further, as weak economic growth heralded lower demand for raw materials, analysts said.

Overall, oil has joined a broad commodity sell-off, with precious and base metals also coming off sharply on fears of a global economic slowdown, said Sucden analyst Andrey Kryuchenkov.

OIL: Crude oil prices tumbled owing to reduced demand for energy around the globe.

Opec on Friday lowered its forecast for world oil demand growth, citing the weak global economy. On Tuesday, the International Energy Agency had said that crude demand was slowing sharply in advanced economies.

The softening economic situation has led to a further slowdown in oil demand growth, the Organization of Petroleum Exporting Countries (OPEC) said in its latest monthly forecast.

Opec, which produces about 40 per cent of the world’s oil, revised its global oil demand growth forecast for 2008 down to 1.17 per cent from 1.20 per cent in July.

The cartel also kept its 2009 forecast for oil demand growth unchanged at 1.03 percent, according Opec’s latest report.

Due to a major slowdown in transport and industrial fuel consumption not only in North America but also in ... Europe and Pacific (industrialised nations), oil demand growth will be on the decline in 2009 which will make the world oil demand growth the lowest since 2002, the monthly report added.

Opec predicted that world oil demand would rise to 86.90 million barrels per day in 2008 -- up from its July estimate of 86.81 million bpd -- and to 87.80 million bpd in 2009.

David Moore, commodity strategist with the Commonwealth Bank of Australia, said “worries about the international economic outlook, and the implications of this for oil demand, remained a damping influence on the oil price. Crude futures had fallen on Thursday after official data showed that the 15-nation eurozone economy shrank 0.2 per cent in the second quarter, the first contraction since the creation of the single European currency in 1999.

Prices had been supported after the US Department of Energy reported Wednesday that US gasoline reserves had fallen by 6.4 million barrels in the week ended August 8. That was worse than forecasts which had called for a drop of just 2.0 million barrels.Gasoline stocks are closely watched at this time of year as American motorists hit the highways for their summer vacations, typically pushing up demand for gasoline, which is refined from crude oil.

Dealers said that fears of supply disruption had receded after Russia and Georgia agreed to a French-brokered peace plan following several days of hostilities.

British energy giant BP, meanwhile, said Thursday that it had resumed pumping gas through the South Caucasus pipeline which transits Georgia, but that the Baku-Supsa oil link remained shut.

Oil prices have sunk since hitting record highs above $147 one month ago. However, crude futures are more than 10 per cent higher than at the start of the year when they surged past $100 for the first time in history.

By Friday, Brent North Sea crude for October delivery dived to $111.12 a barrel from $114.06.

New York’s main oil futures contract, light sweet crude for September sank to $112.35 a barrel, from $116.28 a week earlier.

PRECIOUS METALS: Gold prices tumbled underneath $800 per ounce on Friday, hitting a 10-month low point as the precious metal was hampered by the strengthening US currency and weaker oil prices, analysts said.

The price of gold slid to $772.98, which was the lowest point since the end of October.Gold, which is used in jewellery, dentistry and electronics, has shed one quarter of its value since striking a record high of $1,032.70 in March.

In the foreign exchange market on Friday, the European single currency sank to $1.4663 the lowest point since February 20.

A spike in US consumer price inflation (CPI) on Thursday sparked talk of Federal Reserve interest rate hikes, which could make the dollar more attractive to investors and therefore boosted the greenback, dealers said.

Sentiment has turned more bearish across the metals spectrum (on Friday) after the CPI reading triggered speculation the Fed may raise interest rates in order to cap inflation, said BullionDesk analyst James Moore.

Gold has broken below 800 dollars per ounce, platinum has traded to its lowest since December, silver has slumped almost 15 percent, while palladium has dipped to its lowest in almost two years. A stronger US currency tends to reduce demand for dollar-priced goods, like gold and oil, which become more expensive for buyers holding weaker currencies.

At the same time, gold is regarded by investors as a sound defence against inflation, which in many countries is driven by high crude prices.

BASE METALS: Base metals prices also fell in unison.

Prices (of base metals) remain weak, pressured by fragile sentiment, lingering worries on the health of the global economy, and a stronger dollar coupled with a slow period for metals demand, said Barclays Capital analysts.

COFFEE: Coffee prices dipped in line with most commodity markets.

By Friday on LIFFE, Robusta for November delivery declined to 2,210 dollars per tonne from 2,346 dollars a week earlier.

On the NYBOT, Arabica for December delivery stood at 134.45 US cents per pound from 137.60 cents.

COCOA: Cocoa prices retreated.

By Friday on LIFFE, London’s futures exchange, the price of cocoa for November weakened to 1,458 pounds per ton from 1,473 pounds a week earlier.

On the New York Board of Trade (NYBOT), the December cocoa contract dived to $2,651 per ton from $2,743.

SUGAR: Sugar prices also declined.

By Friday on LIFFE, the price per tonne of white sugar for October delivery dipped to 381.80 pounds from 393.20 pounds the previous week.

On NYBOT, the price of unrefined sugar for October delivery dropped to 13.13 US cents per pound from 13.89 cents.

GRAINS AND SOYA: Grains and soya prices gained ground on the back of strong export sales.

Solid weekly export demand helped provide underlying support for corn and wheat, said Victor Lespinasse at grainanalyst.com.

By Friday on the Chicago Board of Trade, maize for September delivery rose to $5.35 per bushel from $4.98 the previous week.

November-dated soyabean meal -- used in animal feed -- firmed to $12.28 from $11.80.

Wheat for September delivery gained to $8.46 per bushel from $7.94.

RUBBER: Malaysian rubber prices declined this week on lower demand as China-based companies cut production during the Beijing Olympics, dealers said.

The current price has been dropping for a month already although it has not really scratched the bottom yet, said a dealer with an international commodities firm who requested anonymity.

On Friday, the Malaysian Rubber Board’s benchmark SMR20 fell to 299.30 US cents per kilogramme (2.2 pounds) from 309.60 US cents a week ago.—AFP