Copper falls on worries about spike in crude oil

AP News
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Posted: Mar 07, 2011 4:33 PM
Copper falls on worries about spike in crude oil

Copper prices fell 3.6 percent Monday as concerns mounted that rising oil prices may slow the pace of the global economy.

Copper for March delivery fell 15.9 cents to settle at $4.313 per pound.

Investors are worried that persistently high oil prices may increase manufacturing and transportation costs, which could hurt the economy. That would weaken demand for copper, which is used in manufacturing many kinds of products including consumer electronics and construction materials.

"There's a lot of worries about high oil and gas prices spilling over to the economic recovery," Lind-Waldock senior market strategist Phillip Streible said. "And if that slows down, then, of course, that's going to slow down copper and copper demand."

Platinum and palladium, which are used in catalytic converters and other products, also settled lower. Platinum for April delivery fell $17.50 to settle at $1,820.40 an ounce and June palladium fell $19.70 to $790.10 an ounce.

In other metals trading, gold for April delivery added $5.90 to settle at $1,434.50 an ounce and May silver 53.8 cents to $35.865 an ounce.

Oil prices hit a level not seen since September 2008 as Libyan warplanes launched airstrikes on anti-government fighters at a key oil port. It is the fourth week of a rebellion in which militants are trying to oust Moammar Gadhafi.

It's unclear how long the country's oil exports will be cut off. Officials in Libya say oil fields continue to operate, but daily exports of 1.5 million barrels could be cut off for some time.

Benchmark oil for April delivery added $1.02 to settle at $105.44 a barrel on the New York Mercantile Exchange after nearly reaching $107 a barrel earlier in the day.

In other April contracts on the Nymex, heating oil fell 2.36 cents to settle at $3.0657 a gallon, gasoline futures lost 4.25 cents at $3.0039 per gallon and natural gas rose 11.8 cents to $3.927 per 1,000 cubic feet.

Beans and grains settled lower. In May contracts, wheat fell 31.5 cents to settle at $8.0075 a bushel, corn lost 10.5 cents to settle at $7.175 a bushel and soybeans gave up 19 cents to $13.95 a bushel.