World oil prices fell for the fourth consecutive day on Friday, taking the drop to more than $US6 a barrel or more than 6%, as commodity investors reassessed their forecasts in the wake of the downgrading in US economic growth by the Fed and the continued cooling of the Chinese economy.
Not even strong growth in Germany of 2.2%, quarter on quarter, and 1% for the eurozone as a whole, could shift sentiment.
In New York, Nymex West Texas Intermediate fell 35c to $US75.39, wrapping, while Brent North Sea crude for delivery in September slid 29c to $US75.11 a barrel.
Oil lost 6.7% over the week, including a 3% slump on Thursday.
That was oil’s biggest weekly loss since late June/early July, when it lost 8.5%.
Oil prices are 8.7% off their most recent peak, an August 3 price of $US82.55, a 12-week high.
Global markets were still feeling the effects of the Fed’s downgrading of the health of the US economy and its warning that the recovery would be weaker than anticipated.
The slower growth in China for July added to the damage to sentiment, even though it has been quite apparent for two months.
Thursday’s surprise rise in the new US weekly jobless benefit claims added to increasing gloom over the economic outlook.
Weak retail sales for July didn’t shift sentiment either on Friday.
On Friday, the Organisation of Oil Exporting Countries (OPEC) revised up its world oil demand growth estimate for 2010 to 1.2%.
"Given stabilised oil demand in the US, the world oil demand growth forecast is revised up by 0.1 million barrels per day (bpd) to show growth of 1.05 million bpd or 1.2 per cent," the cartel said in its monthly report.
Total demand for 2010 was now expected to reach 85.5 million bpd, up from 84.46 million bpd in 2009.
OPEC warned however that a slower economy in the second half of the year, caused by a phasing out of fiscal stimulus, would likely affect demand.
Wheat prices fell on Friday, the first weekly drop since the end of June.
Traders said the bullish forecast for the US crop helped offset fears about the cuts in the size of the Russian, Canadian and some European crops.
The US Department of Agriculture said US wheat production will rise 2.2% as farmers harvest record yields this year.
The Department cut the size of Russia’s crop and exports, and trimmed forecasts for Canada and several other countries.
The Department said US reserves before next year’s harvest will be the second largest since 1987 and total wheat supplies in delivery locations were much higher than a year ago as farmers have pushed more grain onto the market to take advantage of the price surge since June.
December wheat futures in Chicago fell 9.5c a bushel to $US7.3425 a bushel on Friday.
That left prices down 2.8% on the week, a long way from the huge price rises seen the week before.
On August 6, the price touched $US8.68 and then fell.
December wheat futures on the Kansas City Board of Trade fell 2c to settle at $US7.38, but were still up 0.4% over the week.
Gold prices rose Friday to complete two up weeks in a row
Comex spot gold was at $US1,213.90 an ounce on Friday, up $US2.70 an ounce from Thursday.
Comex December futures eased 10c to $US1,216.60.
Silver ended at $US18.10 an ounce, to be down 2% over the week.
Over the week gold rose 0.9%,
Gold hit a six-week high on Thursday, on the weak weekly jobless claims that added to investor worries about the recovery.
And copper prices fell for the first week in four on those concerns about the impact of slowing economies in the US and Chinese economies.
Comex December copper futures fell 3.3c, or 1%, to close at $US3.2725 a pound in New York.
That left the metal down 2.7% for the week, the first such drop in four weeks.
Three month LME copper fell $US99, or 1.4%, to $US7,156 a tonne or $US3.25 a pound.
Aluminum, zinc, lead and nickel prices also dropped in London. Tin was up.
