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Commodities: Oil tumbles over $5

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Date: Wednesday 09 Jul 2008

LONDON (ShareCast) - Crude oil tumbled over $5 Tuesday, the biggest one day drop in nearly four months, as the dollar gained and concern about the global economic outlook sparked a broad sell-off in commodities.

Crude oil for August delivery settled $5.33 lower at $136.04 a barrel on the New York Mercantile Exchange. Earlier in the session it fell as much as $6.23 to an intra-day low of $135.14 a barrel.

Crude has fallen more than $9 over the last two days. Analysts said oil prices came under pressure from US government predictions that the country’s oil consumption will continue to decline.

Also easing concern about conflict between Iran and Iraq watered down demand for the black stuff as Iranian president Mahmoud Ahmadinejad said there would be no conflict between the two nations.

The rising dollar had gold prices backpeddling with gold for August delivery down $5.50 at $923.30 an ounce on the New York Mercantile Exchange.Gold, like oil, was caught up in the broader commodities sell-off.

The dollar was boosted by Federal Reserve Chairman Ben Bernanke, analysts said, who said the Fed will give mortgage lenders more time to find emergency loans and crackdown on dodgy lending practices in a bid to help iron out the troubled US financial system.

September silver rose 3 cents to end at $17.95 an ounce while July platinum fell $30.90 to $1,950.40 an ounce.

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