SH: Commodities: Oil, gold weaken as China, Ireland dominate
LONDON (SHARECAST) - Crude oil futures fell over 2% on Wednesday, near a one month closing low, on lingering concern that China, the world’s second largest oil consumer, will take official steps to cool inflation.
Crude for December delivery settled $1.90 lower at $80.44 a barrel on the New York Mercantile Exchange, the lowest close since 19 October.
Demand fears overshadowed a surprise drop in US oil and gasoline inventories.
US government data showed a much larger than expected 7.3m drop in crude stockpiles last week, mostly due to lower imports. The Energy Information Administration data did lift oil prices to an intra-day high of $82.67 but prices later declined on demand concerns.
Meanwhile European sovereign-debt problems continued to simmer away. A team of international officials are expected to arrive in the Irish Republic for more talks about the country’s debt crisis following a meeting in Brussels on Wednesday.
Ireland remains reluctant to ask for financial aid but there is growing concern that its debt problems will lead to a domino effect in an already weakened euro zone.
Gold prices struggled to get off the ground, after the previous session’s sell-off, and as investors continue to assess Ireland’s debt problems.
Gold for December closed down $1.50 at $1336.90 an ounce on the Comex division of the New York Mercantile Exchange.
Demand for bullion was also hurt by weaker than expected US inflation data. The consumer-price index rose 0.2% in October, lower than the 0.3% predicted by analysts.
