Oil price plunges, dragging most commodities lower

LONDON - Oil prices slumped this week as traders worried the slowing US economy would dampen demand from the world’s biggest energy consumer, sparking losses across other key commodity markets.

OIL: Crude futures plummeted further from record high points above 147 dollars per barrel that were struck exactly one week ago.

“The recent huge pull back from new record highs above 147 dollars a barrel have come as the economic mess in the US continues, which has hurt current and future forecast demand for oil,” said Sucden analyst Michael Davies. “At the same time there are growing signs that the fall out in the US is impacting the rest of the world, with economic data in Europe, the UK, and Japan worrying and there are even signs of slower growth in India and China, the key demand growth drivers.” Despite tumbling by about 15 dollars over the course of Tuesday, Wednesday and Thursday, oil prices are still up 30 percent since the start of the year when they hurtled past 100 dollars a barrel for the first time.

Prices slid lower Wednesday after a shock rise in US oil and gasoline inventories that indicated record-high prices were eroding energy demand in a US economy that was already weak, traders said.

US government data showed that oil inventories climbed by 3.0 million barrels in the week ending July 11, confounding market expectations for a drop of 2.2 million barrels.

PRECIOUS METALS: Precious metals drew some strength from ongoing economic uncertainty stemming from the troubled US banking sector and the weak US dollar.

Gold, seen as a haven in times of economic troubles, reached 988.02 dollars an ounce, the highest level since March.