COMMODITIES-Oil extends tumble on Europe worry, copper follows

Thu Dec 6, 2012 8:46pm GMT

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* Heightened euro zone risk; stalemate in US budget talks
    * Brent crude oil closes down for fourth day
    * Copper gives back early gains, gold near four-week low
    * Corn down most down in 3 weeks, soy off one-month high

    By Barani Krishnan
    NEW YORK, Dec 6 (Reuters) - Oil closed lower for a fourth
straight session on Thursday and copper gave back early gains as
investors exited commodities on increased risk to the euro zone
outlook and uncertainties over U.S. budget talks.
    Sluggish demand for maize sent corn prices to a three-week
low. Gold held near a four-week low after the European Central
Bank left rates unchanged as expected.
    The euro's tumble against the dollar made commodities priced
in the U.S. currency more expensive for euro holders. The single
European currency was headed for its sharpest drop in a month as
the ECB predicted the euro zone economy would shrink again in
2013 and sharply lowered growth and inflation forecasts.
Political chaos in Italy further weighed on the euro. 
    Cocoa provided one of the few bright spots for investors,
with the London-traded spot contract of the beverage and
confection commodity showing its highest premium in more than
two years. 
    The Thomson Reuters-Jefferies CRB index, a
bellwether for commodities, settled down 0.7 percent, with 11 of
the 19 markets it tracks in negative territory. Crude oil led
the CRB's loss with a drop of nearly 2 percent.
    "Downward movement (in oil) has been pretty consistent this
morning," said Michael Fitzpatrick, editor-in-chief at industry
newsletter EnergyOverview in New York.
    
    OIL, COPPER REVERSE EARLY GAINS
    Oil's benchmark Brent crude in London settled down
1.6 percent at $107.03 a barrel, after rising initially to
$109.16 from Wednesday's close of $108.81.
    U.S. crude, traded in New York, closed down 1.8
percent to $86.26 a barrel.
    Aside from the bearish sentiment over the euro zone, oil and
most other markets were weighed down by the inability of U.S.
lawmakers engaged in budget talks to resolve the "fiscal cliff"
as a Dec. 31 deadline loomed. Without an agreement, some $600
billion in spending cuts and tax hikes will start in January,
threatening U.S. economic growth.
    Copper snapped a five-session rise, with the metal's
benchmark three-month contract in London closing down
$75 at $8,000 a tonne. On Wednesday, London copper hit a near
seven-week high above $8,074. 
    In New York, copper's most-active future contract, March
, settled down 1.1 percent at $3.6445 a lb. Earlier in the
session, it rose to $3.6890 from the previous session's close of
$3.6865. 
    
    CORN SINKS ON WEAK EXPORTS
    Corn futures fell 1 percent to below $7.47 a bushel on
concerns about sluggish demand, after a weekly report showed
export sales well below expectations last week.
    The sinking corn market dragged wheat prices lower and
pulled soybeans back from an earlier one-month high despite the
strongest export sales in nine weeks.
    "Demand is falling faster than supply in corn and wheat,"
said Mike Zuzolo, president at Global Commodity Analytics. 
 Prices at 3:11 p.m. EST (2011 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    86.24    -1.64  -1.9%  -12.7%
 Brent crude                106.75    -2.06  -1.9%   -0.6%
 Natural gas                 3.666   -0.034  -0.9%   22.6%
 
 US gold                   1700.30     7.90   0.5%    8.5%
 Gold                      1698.51     5.10   0.3%    8.6%
 US Copper                  362.70    -4.00  -1.1%    5.6%
 LME Copper                8000.00   -75.00  -0.9%    5.3%
 Dollar                     80.264    0.489   0.6%    0.1%
 
 
 US corn                    747.75    -5.50  -0.7%   15.7%
 US soybeans               1479.25    12.75   0.9%   23.4%
 US wheat                   845.25     3.00   0.4%   29.5%
 
 US Coffee                  140.45     0.85   0.6%  -38.5%
 US Cocoa                  2473.00    13.00   0.5%   17.3%
 US Sugar                    19.36    -0.21  -1.1%  -16.7%
 
 US silver                  33.039    0.156   0.5%   18.4%
 US platinum               1599.20    16.50   1.0%   13.8%
 US palladium               695.55     9.60   1.4%    6.0%
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