LONDON, Feb 7: Oil futures slumped under $40 a barrel on Friday at the end of a tough week for the commodity, as a weakening US economy hit demand causing energy inventories to pile up.

Unemployment in the United States -- the world’s biggest economy and a major consumer of commodities — surged in January to 7.6 per cent, the highest since 1992, as 598,000 jobs were cut, the Labour Department reported Friday.

The number of job losses for the recession-hobbled economy was the worst since 1974, according to the monthly report on nonfarm payrolls, seen as one of the best indicators of economic momentum.

The department also revised up its estimate of December job losses to 577,000 from 524,000.

Overall, another awful payrolls report and, with initial jobless claims still edging higher, February could be even worse, said Capital Economics’ US specialist Paul Ashworth.

OIL: Oil prices plunged below $39 a barrel in New York as a grim unemployment report stoked concerns about weak energy demand in key consumer the United States, traders said.

The market was rocked this week by heightened concerns that the US -- the world’s biggest energy consuming nation -- will slash energy demand to cope with a dramatic downturn, according to analysts.

The price of New York’s light sweet crude oil tumbled as low as $38.60 a barrel on Friday after the latest bad news from across the Atlantic.

The market was also dragged lower this week by news of rising American crude inventories. US government data showed Wednesday that crude stockpiles had soared by 7.2 million barrels last week, more than double the 2.9 million barrels forecast by analysts.It was the fifth consecutive week of gains, and the sharp rise underlined slack demand amid the global financial crisis that has brought the world economy to a near-halt.

The Organization of Petroleum Exporting Countries signalled last week that it would consider more reductions in output as its member countries try to lift prices and in turn their incomes.

Opec, which pumps about 40 per cent of the world’s oil, announced production cuts totalling 4.2 million barrels per day late last year. The cartel is to meet again next month.

After plunging from record highs above $147 last July, oil prices touched multi-year lows in December, at one point nearing $32 a barrel.

By Friday on the New York Mercantile Exchange (NYMEX), light sweet crude for delivery in March tanked to $39.54 a barrel from $41.74 a week earlier.

On London’s InterContinental Exchange (ICE), Brent North Sea crude for March sank to $45.23 a barrel from $46.00 a barrel.

PRECIOUS METALS: Gold prices held above $900 an ounce despite falling over the week.The precious complex, particularly gold and silver, were again buoyed by safe-haven investment demand, said James Moore, an analyst at TheBullionDesk.com.

By Friday on the London Bullion Market on Friday, gold fell to $909.59 an ounce at the late fixing from $919.50 a week earlier.

Silver rose to $12.89 an ounce from $12.51 .

On the London Platinum and Palladium Market, platinum gained to $989 an ounce at the late fixing on Friday from $953 a week earlier.

Palladium gained to $208 an ounce from $191 .

BASE METALS: Base metals prices rallied across the board, “driven by speculation over recovery in China” demand, said analysts at Barclays Capital.

By Friday, copper for delivery in three months jumped to $3,485 a ton on the London Metal Exchange from $3,245 the previous week.

Three-month aluminium gained $1,460 a ton from $1,345 .

Three-month lead rose to $1,167 a ton from $1,151 .

Three-month tin increased to $11,010 a ton from $10,875 .

Three-month zinc climbed to $1,151 a ton from $1,104 .

Three-month nickel advanced to $11,538 a ton from $10,801 .

COCOA: Cocoa prices fell in London on profit-taking, a week after hitting a 24-year high of 2,045 pounds a ton on supply disruptions in key producer Ivory Coast. Concerns in Ivory Coast are still amidst keeping overall prices relatively high, said Sucden Financial analyst Stephanie Garner.

By Friday on LIFFE, London’s futures exchange, the price of cocoa for delivery in March dropped to 1,956 pounds a ton from 1,995 pounds a week earlier.

On the New York Board of Trade (NYBOT), the March cocoa contract edged up to $2,788 a ton from $2,780 .

COFFEE: Coffee prices dipped but losses were capped by potentially stronger demand in China.

Chinese coffee demand could grow at a rate of 20 per cent a year if roasters offer products that are suited to local consumer tastes and budgets,said the commodities review Public Ledger.

By Friday on LIFFE, Robusta for delivery in March edged down to $1,650 a ton from $1,681 a week earlier.

On the NYBOT, Arabica for March declined to 118.45 US cents a pound from 118.80 US cents.

GRAINS AND SOYA: Maize and soya prices traded mixed as the market tracked dry weather in large producer Argentina.

By Friday on the Chicago Board of Trade, maize for delivery in March fell to $3.78 a bushel from $3.79 the previous week.

March-dated soyabean meal -- used in animal feed -- rose to $9.97 from $9.80 .

SUGAR: Sugar prices extended recent gains.

Concerns over an expected global market deficit and the implications of lower output from key producer and consumer India has been a key factor in supporting sugar prices, said analysts at Barclays Capital.

By Friday on LIFFE, the price of a ton of white sugar for delivery in March climbed to 381.90 pounds from 374 pounds a week earlier. On NYBOT, the price of unrefined sugar for March advanced to 13.17 US cents per pound from 12.76 cents.

RUBBER: The price of rubber rose slightly on fresh demand.

Dealers said they expected prices to edge higher in the week ahead with the return of key traders from China following the Lunar New Year celebrations.

On Friday, the Malaysian Rubber Board’s benchmark SMR20 edged up to 139.40 US cents per kilogram, compared with 139.20 cents a last week. —AFP