COMMODITIES-Oil slips on rise in US fuel stocks; gold down too

Wed Jan 9, 2013 5:42pm EST

* Gold slips on speculation of roll back in US stimulus
    * Platinum group metals rally on improving US car sales
    * CRB down for 2nd day, natgas largest loser

    By Barani Krishnan
    NEW YORK, Jan 9 (Reuters) - Oil prices slipped on Wednesday
after a worrying rise in U.S. fuel inventories while gold edged
lower on lingering speculation the Federal Reserve might curtail
its highly stimulative monetary policy.
    Platinum group metals, which include palladium, rallied as
improving U.S. car sales and a better economic outlook triggered
fund buying in the metals widely used for purifying auto
emissions.
    The Thomson Reuters-Jefferies CRB index ended down
0.2 percent for a second straight day after 8 of the 19 markets
on the commodities bellwether fell and two others closed flat.
    Natural gas was the largest loser on the CRB, falling 3.3
percent on fairly mild near-term weather forecasts in the United
States. Bearish U.S. government data this week on gas production
also pressured gas prices. 
    Since the new year began, markets have largely traded
sideways held in check by worries of another impending political
battle over U.S. fiscal issues. 
    Markets were on tenterhooks through December, as opposing
lawmakers in Congress grappled to reach a deal to avert tax
increases and spending cuts that economists warned could push
the U.S. economy back into recession.
    While a fiscal agreement was reached at the last minute,
many lawmakers and their aides fear things may get more toxic in
bitter struggles expected in the next few months over the
nation's debt and deficit burdens. At stake is the U.S.
government's ability to get its finances under control and
whether it might default on debts and suffer further downgrades
in the U.S. credit rating. 
    On the optimistic side, some analysts said an uptick in risk
appetite was likely in the coming week as investor allocations
usually scheduled at the start of the year begin.
    "Generally more long-only money comes into commodities at
the beginning of the year and my sense is that's going to be
still trickling in over the next week or two, so I'm biased to
the upside," said Stephen Briggs, commodities analyst at BNP
Paribas in London.
    Oil's benchmark Brent crude in London closed down 18
cents at $111.76 a barrel. The market turned negative after data
from the U.S. Energy Information Administration showed gasoline
inventories rose 7.4 million barrels last week. 
    In the gold market, the spot price of bullion was a
touch lower at around $1,657 an ounce on worries that the Fed
was considering slowing or stopping its quantitative easing (QE)
that investors have figured into their economic outlooks. 
    The Fed's December policy meeting minutes showed several
officials of the central bank expressing concern that its
balance sheet of nearly $3 trillion risked instability with
further expansion. 
    Successive rounds of QE, or printing new money to boost
asset prices, have been a primary driver of higher gold prices
in recent years. The move has put downward pressure on long-term
U.S. interest rates and fueled inflation fears.
    Among precious metals, palladium outperformed gold, rising
2.4 percent to $684 an ounce for its biggest one-day gain in
around two weeks. For the week, however, palladium was still
down 0.3 percent after Monday's loss of almost 3 percent.
    
 Prices at 5:13 p.m. EST (2213 GMT)      
                             LAST/      NET    PCT
                             CLOSE      CHG    CHG
 US crude                    93.20     0.05   0.1%
 Brent crude                111.67    -0.27  -0.2%
 Natural gas                 3.113   -0.105  -3.3%
 
 
 US gold                   1655.50    -6.70  -0.4%
 Gold                      1657.24    -0.05   0.0%
 US Copper                  367.05    -0.15   0.0%
 LME Copper                8080.00     0.00   0.0%
 Dollar                     80.547    0.202   0.3%
 
 
 
 US corn                    694.25     5.50   0.8%
 US soybeans               1419.75     6.00   0.4%
 US wheat                   745.50    -5.00  -0.7%
 
 
 US Coffee                  147.90    -0.25  -0.2%
 US Cocoa                  2223.00     8.00   0.4%
 US Sugar                    18.72     0.05   0.3%
 
 
 US silver                  30.249   -0.216  -0.7%
 US platinum               1597.80    17.20   1.1%
 US palladium               688.20    20.35   3.0%
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