Oil Slips On Forecasts For Milder Weather; Dollar And Metals Rise
BY REUTERS
Posted 12/4/2006
Oil prices fell a dollar Monday amid forecasts that a cold spell in the U.S. would end by the weekend. Metals prices edged higher.
The Reuters/Jefferies CRB Index, which tracks 19 commodity futures from grains to livestock, slid 1.82% to 315.38. The energy-heavy Goldman Sachs Commodity Index fell 1.97% to 5,924.57.
Benchmark February gold on the COMEX division of the New York Mercantile Exchange rose a shade to $650.9 an ounce, from Friday’s settle of $650.6, holding below last week’s 16-week top of $655.50.
The dollar also edged higher on Monday after it slid to its lowest level in months against most major currencies last week.
The dollar had been affected by weak U.S. factory data, which reinforced expectations that the Federal Reserve would cut benchmark interest rates next year.
The Institute for Supply Management (ISM) said its index of national factory activity came in below market expectations at 49.5 in November from 51.2 in October. It is the first time in more than three years that the index has fallen below the 50-point threshold dividing expanding activity from a contraction.
March silver on COMEX rose to $14.245 an ounce from $14.19.
COMEX copper for March ended up at $3.1760 a lb from $3.1720 Friday.
On the London Metal Exchange, three-months copper closed up at $7,030 a tonne from Friday’s $6,975
U.S. crude oil futures fell back to below $63 on Monday amid profit-taking after last week’s rally, milder weather forecasts and as the market doubted another OPEC cut in production.
Heating oil and gasoline futures skidded, also giving up chunks of their hefty gains from last week in the wake of a drawdown in fuel stocks and forecasts for colder weather.
For Monday’s downturn, traders cited predictions by the National Weather Service for above-normal temperatures next week, including the Northeast, the key heating oil consuming region, after a cold spell this week.
On the New York Mercantile Exchange, January crude settled 99 cents lower, or 1.56%, at $62.44 a barrel, after tumbling to $61.90, lowest since Wednesday. It peaked last week at $63.77, which marked the highest since $64 on Sept. 28. The entire U.S. was expected to warm to above-normal temperatures by this weekend.