LONDON, July 19: Oil prices slumped this week as traders worried the slowing US economy would dampen demand from the world’s biggest energy consumer, sparking losses across other key commodity markets.

OIL: Crude futures plummeted further from record high points above $147 per barrel that were struck exactly one week ago.

The recent huge pull back from new record highs above $147 a barrel have come as the economic mess in the US continues, which has hurt current and future forecast demand for oil, said Sucden analyst Michael Davies.

At the same time there are growing signs that the fall out in the US is impacting the rest of the world, with economic data in Europe, the UK, and Japan worrying and there are even signs of slower growth in India and China, the key demand growth drivers.

Despite tumbling by about $15 over the course of Tuesday, Wednesday and Thursday, oil prices are still up 30 per cent since the start of the year when they hurtled past 100 dollars a barrel for the first time.

Prices slid lower Wednesday after a shock rise in US oil and gasoline inventories that indicated record-high prices were eroding energy demand in a US economy that was already weak, traders said.

US government data showed that oil inventories climbed by 3.0 million barrels in the week ending July 11, confounding market expectations for a drop of 2.2 million barrels.

Just one week ago, London’s Brent oil jumped to a record high $147.50 per barrel and New York crude struck a life-time peak of $147.27 on the back of the weak dollar and tensions about key producers Iran and Nigeria.

Developments in the oil-rich Middle East continue to be closely watched after an apparent sudden shift in US diplomatic policy toward Iran announced late Tuesday.

The United States said it was sending Under Secretary of State William Burns to talks on Saturday between Iran’s nuclear negotiator, Saeed Jalili, and the European Union’s foreign policy chief, Javier Solana.

The US and other major powers have been locked in a long-running standoff with Iran over its nuclear drive, which they suspect is aimed at making weapons. Iran insists its activities are aimed at energy production.

By Friday, Brent North Sea crude for September delivery dived to $132.30, sharply down from $144.15 a week earlier.

New York’s main oil futures

contract, light sweet crude for Aug-

ust plummeted to $131.15 from $146.55.

PRECIOUS METALS: Precious metals drew some strength from ongoing economic uncertainty stemming from the troubled US banking sector and the weak US dollar.

Gold, seen as a haven in times of economic troubles, reached $988.02 an ounce, the highest level since March.

The euro hit a record high of $1.6038 on Tuesday on scepticism that a US government rescue of mortgage finance giants Fannie Mae and Freddie Mac would contain worries about the US financial sector, analysts said.

A weaker greenback tends to encourage demand for dollar-priced goods because they are cheaper for buyers with stronger currencies.

We believe that in the near term gold will be driven by risk aversion fears and, following the weekend moves to reassure financial markets about the future of Freddie and Fannie there may be some respite to these fears, said analyst James Moore at TheBullionDesk.com.

But this may be only short-lived. Investors have become much more worried about systemic risk and, once worried, investors will remain concerned until there is clear evidence that the situation is getting better.The price of white metal platinum meanwhile fell on hopes of an improving supply situation in key producer South Africa.

On the London Bullion Market, gold eased to $959.75 per ounce at Friday’s late fixing from $962.75 a week earlier.

Silver rose to $18.55 per ounce from $18.38.

On the London Platinum and Palladium Market, platinum fell

to $1,849 per ounce at the late fix-

ing on Friday from $2,030 a week earlier.

Palladium slipped to $419 per ounce from $454.

BASE METALS: The base metals complex mainly fell on worries that slower US growth would sap demand.

We remain uninspired by the near term outlook for copper and aluminium as slowing (economic) growth is slowing demand growth for both metals, said UBS analyst John Reade.

Aluminium had hit a historic $3,380 per tonne the previous week after Chinese moves to cut production.

By Friday, copper for delivery in three months fell to $8,078 per tonne on the London Metal Exchange from $8,365 a week earlier.

Three-month aluminium sagged to $3,040 per tonne from $3,380.

Three-month lead dipped to $1,965 per ton from $2,025 .

Three-month zinc slid to $1,806 per ton from $2,050.

Three-month tin rose to $23,400 per ton from $23,201.

Three-month nickel receded to $20,300 per tonne from $21,900.

COFFEE: Coffee prices dipped after the sharp drop in oil.

Oil prices set off another chain reaction in the commodity complex, including (Arabica) coffee which slumped below 140 US cents, said Sucden analyst Ralph Hawes.

By Friday on LIFFE, Robusta for September delivery fell to $2,373 per ton from $2,361 a week earlier.

On the NYBOT, Arabica for September delivery slid to 137.50 US cents per pound from 142.62 cents.

COCOA: Cocoa prices fell, mirroring most other raw materials.

By Friday on LIFFE, London’s futures exchange, the price of cocoa for September delivery dropped to 1,446 pounds per tonne from 1,550 pounds a week earlier.

On the New York Board of Trade (NYBOT), the September cocoa contract sank to $2,807 per ton from $2,926.

SUGAR: Sugar also headed lower.

By Friday on LIFFE, the price per tonne of white sugar for October delivery dipped to 359 pounds from 390.50 pounds the previous week.

On NYBOT, the price of unrefined sugar for October delivery declined to 12.53 US cents per pound from 13.80 cents.

GRAINS AND SOYA: Grains and soya prices sank on the prospect of favourable growing conditions in key producers Australia and the United States, as well as tumbling oil prices.

Lower crude prices tend to weaken prices of maize and soya, which are used to produce ethanol, a cheaper alternative to gasoline or petrol.

By Friday on the Chicago Board of Trade, maize for August delivery slid to$6.29 per bushel from $6.91 the previous week.

August-dated soyabean meal -- used in animal feed -- sank to $15.15 from $16.15.

Wheat for August delivery was down at $8.10 per bushel from $8.30.

RUBBER: Malaysian rubber prices declined in line with the lower cost of crude, which is used to make synthetic rubber.

Prices eased as oil prices declined, said one dealer.

On Friday, the Malaysian Rubber Board’s benchmark SMR20 fell to 316.05 US cents per kilogramme (2.2 pounds) from 322.40 US cents a week ago.—AFP