COMMODITIES-Oil drops as Norway strike ends; PFG crisis starts
* End of Norway strike offsets EU deal for Spain
* Worries about futures broker PFG rattles investors
* Oil prices down 2 pct, Brent back below $100
* Gold erases early rally to end lower
* Soy retreats from record highs, corn retreats
By Barani Krishnan
NEW YORK, July 10 (Reuters) - Oil prices fell more than 2 percent on Tuesday after Norway's oil industry ended its three-week long strike, and metals and agricultural markets fell too, highlighting the fragility of the recent rebound in commodities.
Jitters across commodities markets on news that client funds were missing from another U.S. futures brokerage, PFGBest, kept investors away, analysts said.
Last year's fiasco at MF Global remains fresh in investors minds.
The dollar's strength against other major currencies also dissuaded holders of the euro and other denominations from buying commodities priced in the greenback.
Soybeans retreated from Monday's record high and corn backed away from a 13-month high due to forecasts for rain by the end of the week in some parched growing areas of the U.S. Midwest.
White sugar futures in London was one of the few commodities that ended up, hitting a 3-1/2 month high as brisk consumer buying and lingering problems in top growers Brazil and India stoked the sweetener's steady advance.
The 19-commodity Thomson Reuters-Jefferies CRB index closed down 1.4 percent. That erased most of the previous session's 2 percent gain largely due to the crisis in Norway pushing up oil prices then.
Since trading for the third quarter began this month, commodities have turned more volatile compared to their broadly lower trend in previous months as developments in European debt counteracted with other market concerns and fundamentals.
Gold initially rallied about 1 percent in Tuesday's trade after EU ministers agreed to provide up to 100 billion euros ($123 billion) in aid to ailing Spanish lenders. The spot price of gold later closed about 1.5 percent down after broker PFGBest told its customers their accounts had been frozen.
Oil markets fell after Norway's government, empowered by law to force striking workers back on the job, ordered a settlement late on Monday of a dispute between oil workers and employers.
The government intervention came as the strike entered its third week and minutes before an industry-imposed lockout. It restored more than 2 million barrels per day (bpd) of Norwegian crude, natural gas liquids and condensate to markets. "The intervention means that a major supply disruption is prevented," Oliver Jakob, managing director at consultancy Petromatrix, wrote in a note.
Benchmark Brent crude oil in London returned to below $100 per barrel, tumbling $2.35 to settle at $97.97 a barrel. U.S. crude fell $2.08 to finish at $83.91.
The selloff in gold came after U.S. investment bank Jefferies Group said it has started to liquidate trading positions of PFGBest. The founder and chairman of Iowa-based PFGBest, Russell R. Wasendorf Sr., was reported to be in coma after an apparent suicide attempt on Monday.
"It's déjà vu all over again," said John Roe, co-founder of the Commodity Customer Coalition (CCC). The CCC was set up in the aftermath of MF Global's collapse last October to help clients recoup their money.
In its dying days, MF Global dipped into customer funds to help meet margin calls, investigators believe.
The spot price of gold, which tracks trades in bullion, fell 1.3 percent to below $1,566 an ounce from a session high of $1,600.90 earlier in the day.
Copper's losses represented the fourth decline in five days. Three-month copper on the London Metal Exchange shed $70 to end at $7,490 a tonne after dealing between $7,482 and $7,585.
On the agricultural front, November, the most-active contract in soybeans, shed 9-1/4 cents, or 0.6 percent, to $15.38-1/2 a bushel in Chicago trade. Soybeans' thinly traded spot contract, which climbed to a record top of $16.79-1/2 a bushel in the last session, fell 16-1/4 cents, or 1 percent, to $16.48-3/4 on Tuesday.
In corn, the December contract fell 12-1/2 cents, or 1.7 percent, to $7.17-1/2 a bushel. Prices at 5:17 p.m. EDT (2117 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG US crude 84.02 -1.97 -2.3% -15.0% Brent crude 97.97 -2.35 -2.3% -8.8% Natural gas 2.737 -0.146 -5.1% -8.4% US gold 1580.90 -9.30 -0.6% 0.9% Gold 1564.50 -22.15 -1.4% 0.0% US Copper 339.80 -3.35 -1.0% -1.1%
Dollar 83.400 0.239 0.3% 4.0% CRB 288.650 -4.060 -1.4% -5.5% US corn 717.50 -12.50 -1.7% 11.0% US soybeans 1557.75 -15.25 -1.0% 30.0% US wheat 835.25 -8.50 -1.0% 28.0% US Coffee 184.50 2.15 1.2% -19.1% US Cocoa 2307.00 -12.00 -0.5% 9.4% US Sugar 22.92 -0.04 -0.2% -1.3% US silver 26.882 -0.562 -2.0% -3.7% US platinum 1428.70 -16.20 -1.1% 1.7% US palladium 576.60 -7.30 -1.3% -12.1%
(Editing by Bob Burgdorfer)
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