LONDON (SHARECAST) - A 1% drop in oil pricesMonday was blamed on easing concerns about a tropical storm near the Gulf of Mexico and a failure to respond well to what was slightly positive economic data.
US light crude fore August delivery dropped 61 cents to $78.25 a barrel in New York, having made up over 2% last week as Tropical Storm Alex lurked near the oil producing Gulf.
But the National Hurricane Center says the storm is moving away and isn’t likely to touch the key refining areas, allowing some companies who evacuated staff as a precaution to begin sending them back.
Alex is the first named storm of the season and experts predict there’ll be another 20 of these over the coming months.
Prices were also under pressure following the weekend’s meeting of the G20 in Toronto, where a focus on austerity measures dampened hopes of a strong economic recovery.
Leaders pledged to halve deficits by 2013 and stabilize debt by 2016, a tough call for many which traders fear could harm demand for the black stuff.
On the metal markets, gold lost around 1% on dollar strength and a slight recovery on equity markets.
August gold fell $17.60 to $1,238.60 an ounce as the dollar gained ground. Investors feel the US is among the best placed for recovery, and so is most likely to start raising interest rates sooner than others.
Elsewhere, silver tumbled over 2%, although an increase in US consumer spending helped palladium and platinum advance briefly.
The pair, used extensively in catalytic converters, could benefit from any increase in car sales.
