NEW YORK: Oil prices fell on Wednesday for a fourth straight session and copper extended losses for a third running day as weak US data prompted investors to fear a prolonged gloom in the world's largest economy.
Corn and wheat retreated from Tuesday's sharp rally as cooler weather in the US Midwest offset worries about the impact of a recent heatwave on the region's crops.
The broad sell-off caused the 19-commodity Reuters-Jefferies CRB index to drop 1.3 percent, marking its largest one-day decline in six weeks.
Gold was the only major commodity that bucked the decline. Futures of the precious metal rose nearly 2 percent -- its biggest leap in three weeks -- as investors opted for so-called safe-haven assets.
Data showed the US services sector fell in July to its lowest level since February 2010. New US factory orders for June also slipped, hurt by weak demand for transportation equipment.
Investors are bracing for more gloom when the government releases its monthly jobs report on Friday.
Earlier this week, markets were weighed down by weaker-than-expected manufacturing data after dismal second-quarter US growth numbers released at the end of July.
New York-traded crude oil fell 2 percent to below $92 per barrel and Brent crude in London lost nearly 3 percent to around $113 a barrel as a surge rise in US petroleum stockpiles added to the bearish economic data.
The US Energy Information Administration, which gathers and releases all official data on the US energy sector, said gasoline stockpiles rose sharply and demand over the past four weeks fell 3.6 percent compared with a year-ago.
"With increasing concern over the economy and the consumer, the four-week, year-on-year, decline in gasoline demand sticks out as another indicator of consumer weakness and possibly bodes poorly for Friday's employment data," said John Kilduff, partner at New York energy fund Again Capital LLC.
In copper, the most active US futures contract, September, settled down 1.6 percent at $4.3260 a lb in New York in spite of a strike at the giant Escondida copper mine in Chile providing fundamental support to prices.
London's benchmark three-month copper finished down 1.4 percent at $9,549 a tonne.
US gold futures most-active contract, December, settled up 1.3 percent at $1,666.30 after setting an all-time peak above $1,675 an ounce.
Gold has hit record highs several times over the last three months as investors worried about sovereign debt crises in Europe and the United States veered toward the yellow metal. For the year so far, it has risen 17 percent.
Copyright Reuters, 2011
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