Metals, grains prices follow oil lower

Crude oil prices fell substantially Tuesday after Hurricane Gustav passed through the Gulf of Mexico and made landfall on the US Gulf Coast without doing much damage to oil facilities in the region over the Labor Day holiday weekend in the United States and as the US dollar strengthened versus the euro.

Almost all activity on offshore oil and gas platforms in the Gulf of Mexico was halted and 23 Gulf Coast refineries were shut down either partially or completely ahead of the storm and while it is unclear when production in the region will resume, some companies are reported to have said they could start returning crews to offshore facilities as early as Wednesday.

October contracts for West Texas Intermediate crude was down $5.75 to $109.71 per barrel at the close of floor trade on the New York Mercantile Exchange after going as low as $105.46 in earlier trade.

Nymex October gasoline futures and October heating oil each fell 12 cents, to $2.73 per gallon and $3.07 per gallon respectively, while October natural gas dropped 65 cents to $7.29 per million British thermal units.

Metals prices followed crude prices lower.

Among precious metals, December gold was $25.70 lower to $809.50 per troy ounce while December silver fell 56 cents to $13.15 per troy ounce and October platinum plummeted $86.30 to $1,403.50 per troy ounce.

Copper also saw declines as concerns continued that demand for the metal used in home construction and in automobile and appliance manufacture continue.

December copper dropped 11 cents to $3.27 per pound in New York, while three-month copper was down $25 to $7,280 per tonne, or $3.30 per pound, on the London Metal Exchange.

The decline in appeal of commodities as an investment to protect money from inflation extended to grains as well, as prices dropped on the Chicago Board of Trade.

CBOT December corn was 15 cents lower to $5.69 per bushel while November soybeans fell 26 cents to $12.98 per bushel and September wheat dropped 33 cents to $7.46 per bushel.

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