LONDON, July 26: Oil prices fell further this week, leaving them about $20 off record highs, while there were also losses for metals futures.

OIL: Oil prices headed south again amid a drop in fuel demand across the United States, the world’s biggest consumer of energy.

Crude futures had risen earlier Friday and on Thursday in what traders described as a technical rebound following two days of heavy falls.

Ken Hasegawa, manager of the energy desk at Newedge brokerage, cited by Down Jones Newswires, said on Friday that the market would trade in a short-term range of $123-128.

On Wednesday, crude futures had tumbled by about four dollars after a bigger-than-expected increase in US gasoline (petrol) reserves signalled weaker demand in the United States.

At the same time, concerns eased over Hurricane Dolly in the Gulf of Mexico as the storm tracked away from oil installations there.

Oil prices have shot to a series of record highs this year, partly because of political tensions involving oil-producing nations like Iran, which refuses major powers’ demands to halt its disputed nuclear programme.

However prices have tumbled since striking record heights of above $147 on July 11.

Analysts said the US government’s latest weekly snapshot on energy inventories had suggested weaker demand for energy.

US gasoline stockpiles rose 2.9 million barrels in the week ending July 18, far outstripping analysts’ consensus forecasts for a gain of 200,000 barrels.

Gasoline consumption was also 2.4 per cent lower compared to a year earlier as drivers faced sky-high pump prices of $4.11 a gallon (3.78 litres) during a period when US demand for motor fuel is traditionally at a peak.

The slide in crude (futures from recent highs) has been primarily driven by concerns of weaker demand as a result of higher prices, as economic problems persist, said Michael Davies at the Sucden brokerage in London.

Originally these fears focused on the US, with data there showing significantly lower demand for gasoline, but economic data has started to point to problems in Europe and slower growth in the key drivers of oil demand growth; China and India.”By Friday, New York’s main oil futures contract, light sweet crude for September delivery slid to $124 a barrel from 131.15 dollars a week earlier.

Brent North Sea crude for September dropped to $125.02 from $132.30.

PRECIOUS METALS: Precious metals prices reclined as the dollar firmed.

A stronger US currency weighs on demand for dollar-priced goods because they become more expensive for buyers holding weaker currencies.

Gold was also affected by sliding oil prices. The precious metal is seen as a haven especially in times of high inflation, which is fuelled by soaring energy prices.

In the short-term gold will remain at the mercy of both oil and the dollar, said analysts at Barclays Capital.

However we still believe the current geopolitical/economic environment will keep investors in a more cautious mood, with demand for safe-haven type assets likely to remain high.”On the London Bullion Market, gold fell to $920.50 per ounce at Friday’s late fixing from $959.75 a week earlier.

Silver dropped to $17.55 per ounce from $18.55.

On the London Platinum and Palladium Market, platinum decreased to $1,726 per ounce at the late fixing on Friday from $1,849.

Palladium slipped to 383 dollars per ounce from $419.

BASE METALS: Base metals prices mostly dropped.

Thursday saw large falls in prices on the London Metal Exchange as global demand concerns were exacerbated by very week eurozone and US data: In particular, US existing home sales in the US Came in well below consensus forecasts, said UBS analyst John Reade.

By Friday, copper for delivery in three months fell to $7,930 per ton on the London Metal Exchange from $8,078 a week earlier.

Three-month aluminium dropped to $2,957 per ton from $3,040.

Three-month lead rose to $2,123 per ton from $1,965.

Three-month zinc edged up to $1,825 per ton from $1,806.

Three-month tin decreased to $22,449 per ton from $23,400.

Three-month nickel declined to $18,299 per tonne from $20,300.

GRAINS AND SOYA: Grains and soya prices sank for a third week running.

The reason for the big drop of corn and soybeans is their attachment to the crude oil market, said Allendale analyst Joe Victor.

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

By Friday on the Chicago Board of Trade, maize for September delivery slid to 5.73 dollars per bushel from $6.29 the previous week.

August-dated soyabean meal — used in animal feed — sank to $13.82 from $15.15

Wheat for August delivery was down at $7.95 per bushel from $8.10.

COFFEE: Coffee prices dropped.

By Friday on LIFFE, Robusta for September delivery eased to $2,330 per ton from $2,373 a week earlier.

On the NYBOT, Arabica for September delivery retreated to 135.90 US cents per pound from 137.50 cents.

COCOA: Cocoa prices steadied in London and New York.

By Friday on LIFFE, London’s futures exchange, the price of cocoa for September delivery rose to 1,482 pounds per tonne from 1,446 pounds a week earlier.

On the New York Board of Trade (NYBOT), the September cocoa contract dipped to $2,762 per ton from $2,807.

SUGAR: Sugar prices slid for a second week running.

By Friday on LIFFE, the price per ton of white sugar for October delivery fell to 355.90 pounds from 359 pounds the previous week.

On NYBOT, the price of unrefined sugar for October delivery dropped to 12.30 US cents per pound from 12.53 cents.

RUBBER: Malaysian rubber prices declined further.

On Friday, the Malaysian Rubber Board’s benchmark SMR20 fell to 311.40 US cents per kilogramme from 316.05 US cents a week ago.—AFP