Oil slides on demand concerns
It was another day of losses on the oil markets as traders worried that demand could suffer following a report out of the US revealing inflation rising at its fastest pace in over two years.
US light crude for January delivery closed 98 cents lower at $91.27 a barrel on the New York Mercantile Exchange, having fallen below $91 earlier on. News that the US consumer prices rose 0.8% in November due to high energy costs, more than the 0.6% analysts expected, sent the dollar higher against the major currencies. Core inflation, which strips out volatile food and energy prices, grew at its fastest pace in 10 months, which analysts reckon lessens the chance of another drop in US interest rates.
A report by the International Energy Agency in which it lifted forecasts for global oil demand in 2008 by 115,000 barrels a day had given prices a boost, although traders decided the figures were a bit optimistic. On the metal markets, gold was down at its lowest in a week Friday, marking its second slip in a row, as the stronger dollar reduced the yellow metal’s appeal.
Gold for February delivery ended the session down $6 at $798 in New York, having dropped $14.80 on Thursday. Analysts think gold will trade either side of $800 in the run up to the new year. Elsewhere, silver was lower, platinum and palladium both rose, while copper was easier on the day. (sharecast)
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