LONDON, Dec 6: Commodity prices tumbled this week with losses accelerated Friday by news of half-a-million job losses in the United States that fuelled expectations of steep falls in demand for raw materials.

It’s a very negative environment in terms of interest for commodities because of the belief that not only the US but many economies are in recession, said Bill Nelson, analyst at research group Doane Advisory Services.

There are fears of reduced demand for commodities in general.

OIL: Oil prices plunged below $40 on Friday to their lowest levels in nearly four years as worse-than-expected jobs data in the United States raised the prospect of severe falls in energy demand.In London, Brent North Sea crude slid to $39.50 a barrel, the lowest level since January 2005. The New York light sweet crude contract for January was at $42.00 , also a near four-year low.

The US Labour Department reported Friday that the US economy had lost 533,000 jobs in November, sending the unemployment rate to a 15-year high of 6.7 per cent.

The number of job losses was much higher than the 325,000 expected.

US President George W. Bush said the data confirmed that the world’s biggest economy and largest energy-consuming nation was in recession.

Today’s job data reflects the fact that our economy is in a recession, Bush said. My administration is committed to ensuring that our economy

succeeds and I know the incoming administration shares the same commitment.”Oil prices have plunged by more than two thirds since reaching record highs above $147 in July, pulled down by a widening global economic slowdown that weighs on demand.

The tumble in prices is sharply reducing income for oil producing countries, including the world’s biggest, Saudi Arabia and Russia.

It is “way, way premature” to think that the market has hit bottom, said David Moore, a commodities strategist with the Commonwealth Bank of Australia.

The focus is well and truly on the weakness in consumption and that doesn’t seem likely to go away in the next 24 hours. The International Energy Agency on Friday lowered its projections for global oil demand in 2008-2013, foreseeing annual growth of 1.2 per cent rather than 1.6 per cent in the face of a worldwide economic slump.

In an announcement ahead of the US jobs data, the IEA said demand for oil products should climb from 86.2 million barrels a day in 2008 to 91.3 million in 2013, altering forecasts it had made in July.

Commenting on the US employment figures, Ian Shepherdson, chief US economist at High Frequency Economics, said: This is almost indescribably terrible. In the past six months the US has lost 1.55 million jobs, almost as many as were lost in the whole 2001 recession, which included 9/11 and the two months after. The pace of job losses is accelerating alarmingly. The US, eurozone, Japan and other economies are in recession and investors are worried about an increasingly marked decline in oil demand among the industrialised countries combined with a slowdown in emerging countries such as China.

Opec president Chakib Khelil on Wednesday said there was no “floor” for the price of oil.

Oil prices began the week sharply lower after the Organization of Petroleum Exporting Countries (Opec) decided at a weekend meeting against cutting production, preferring to wait until December before reducing crude exports.

The cartel’s secretary general, Abdalla Salem El-Badri, said on Monday that Opec would decide on a “major” output cut next month if the oil market were deemed to be deteriorating.

By Friday on London’s InterContinental Exchange (ICE), Brent North Sea crude for delivery in January slumped to $40.06 from $51.68 a week earlier.

On the New York Mercantile Exchange (NYMEX), light sweet crude for January dropped to $42.32 from $52.00 .

PRECIOUS METALS: Gold, silver, platinum and palladium slumped.

On one hand, gold has again proven itself as a safe haven with its price more resilient than those of other assets, said Morgan Stanley analyst Hussein Allidina.

On the other hand, gold has not rallied through this financial and economic crisis to the extent that some, including ourselves, expected. Silver fell in gold’s wake, while platinum and palladium — used to make catalytic converters in vehicles — were weighed down by the collapse of the US auto sector.

On the London Bullion Market, gold dropped to $749 an ounce at Friday’s late fixing from $814.50 a week earlier.

Silver dropped to $9.46 an ounce from $10.12.

On the London Platinum and Palladium Market, platinum slid to $788 an ounce at the late fixing on Friday from $876 a week earlier. Palladium fell to $164 an ounce from $187.

BASE METALS: Base metals prices slumped, with copper and aluminium hitting multi-year lows.

Copper on Friday dropped to $3,055 a ton — the lowest level since June 2005, as aluminium struck a five-year low of $1,491.

In many ways we would have thought that the poor economic news had already been discounted in the metals by now and news of production cutbacks would be starting to underpin the metals but this is not the case, said Basemetals.com analyst William Adams.Indeed the slowdown in China in recent weeks seems to be the main factor that has changed for the worst. By Friday, copper for delivery in three months slid to $3,025 a ton on the London Metal Exchange from $3,610 a week earlier.

Three-month aluminium fell to $1,513 a ton from $1,755.

Three-month lead declined to $928 a ton from $1,080.

Three-month zinc dropped to $1,080 a ton from $1,195 .

Three-month tin decreased to $11,475 a ton from $12,305 .

Three-month nickel retreated to $9,100 a ton from $9,850.

COCOA: Cocoa futures fell after a recent rally.

By Friday on LIFFE, London’s futures exchange, the price of

cocoa for delivery in March dropped to 1,488 pounds a ton from 1,515 pounds a week earlier.

On the New York Board of Trade (NYBOT), the March cocoa contract decreased to $2,146 a ton from $2,280 .

COFFEE: Coffee prices headed south.

By Friday on LIFFE, Robusta for delivery in January slumped to $1,558 a ton from $1,980 a week earlier.

On the NYBOT, Arabica for March fell to 102.45 US cents a pound from 115.80 cents.

SUGAR: Sugar prices weakened to under 300 pounds a ton in London.

By Friday on LIFFE, the price of a ton of white sugar for delivery in March slid to 294.50 pounds from 328.40 pounds the previous week.

On NYBOT, the price of unrefined sugar for March dropped to 10.55 US cents per pound from 11.88 cents.

GRAINS AND SOYA: Grains and soya prices fell sharply.

By Friday on the Chicago Board of Trade, maize for delivery in March dropped to $3.19 a bushel from $3.66 the previous week.

January-dated soyabean meal — used in animal feed — slipped to $7.86 from $8.83.

Wheat for March dived to $4.75 a bushel from $5.61.

RUBBER: Rubber prices dived in tandem with crude oil, which is used to make synthetic rubber.

Falling oil futures make the cost of synthetic rubber more competitive, pressuring natural rubber prices.

On Friday the Malaysian Rubber Board’s benhcmark SMR20 slumped to 116.10 US cents per kilo from 140.35 US cents per kilo a week earlier.

—AFP