Saturday, November 19, 2011

COMMODITIES-Most markets down again; oil snaps 7 weeks of gain

NEW YORK (Nov 18): Most commodities fell again on Friday, with U.S. oil prices finishing their first week lower since early October on worries over Europe and selling by investors taking profit from seven weeks of gains.

Agricultural markets from corn to cocoa and sugar joined oil on the downside as burgeoning crop stockpiles and weak demand outlooks pushed investors to sell.

Only metals markets offered some solace to optimistic investors as gold and copper rebounded from Thursday's beating, although both were sharply down on a weekly basis.

For the coming week, investors braced for more shocking headlines from the euro zone debt crisis and possible surprises from a surfeit of U.S. economic data, including home sales, inflation and job indicators.

A lot of investors "are sitting on the sidelines, scared to death," said Roy Huckabay, grains analyst for The Linn Group in Chicago.

The 19-commodity Reuters-Jefferies CRB index settled Friday's session down 0.7 percent. The index has lost more than 3 percent over the last two days.

Oil closed down after a bout of profit-taking on this week's big moves in the spread between the U.S.-based West Texas Intermediate crude and London's Brent.

The market was initially up on Friday on speculation that the European Central Bank may start lending to the International Monetary Fund to bail out major euro zone economies.

It fell as euro zone worries reemerged later in the session and investors began cashing in their WTI-Brent spread positions. Selling of the expiring December U.S. contract of WTI to buy the pricier new benchmark, January, also pushed the market lower.

"Liquidations on the December contract and profit-taking ahead of the Thanksgiving holiday (next) week pulled down U.S. crude futures," said Phil Flynn, analyst at PFGBest Research in Chicago.

WTI's December contract slid $1.41 to settle at $97.41 a barrel, while the one for January fell $1.26 to settle at $97.67 a barrel. Brent crude dipped 66 cents to settle at $107.56 a barrel.

In metals, the benchmark U.S. copper futures contract, December settled the session up half a percent at $3.4020 per lb. For the week, it was down 2.5 percent. U.S. gold futures for December settled up $4.90 at $1,725.10 an ounce. For the week, the contract was down 3.6 percent, its biggest drop since the first week of October. - Reuters

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