April 12, 2011 / 1:46 PM / 9 years ago

COMMODITIES-Down broadly as oil falls on Goldman caution



 * Oil down 3 pct on Goldman's 2nd bearish call in 2 days
 * Weak Chinese buying of metals; Japan crisis also weigh
  (Recasts, updates prices to U.S. trading session and
refreshes analysts' views; changes dateline to NEW YORK,
previously LONDON)
 By Barani Krishnan
 NEW YORK, April 12 (Reuters) - Crude oil fell 3 percent on
Tuesday, leading a broad fall in raw material prices, after
commodities bull Goldman Sachs forecast lower oil prices,
sparking a sell-off in some energy contracts.
 Also pushing down oil prices was a warning from the
International Energy Agency (IEA) that sky-high oil was
beginning to dent demand growth.
 Weak metals demand from China and the ongoing nuclear
crisis in Japan weighed on other commodity prices. Copper
prices fell more than 2 percent [MET/L], while gold slipped 1
percent [GOL/], sugar lost nearly 2 percent [SOF/L], and wheat
dropped almost 3 percent [GRA/].
 Goldman, one of the biggest commodities bulls, called for a
nearly $20 fall in the price of Brent crude oil LCOc1 in the
coming months, saying speculators have pushed prices ahead of
fundamentals.
 The IEA, the West's energy watchdog, said high prices could
ultimately self-regulate through a global economic slowdown.
 Brent crude fell about $3 a barrel, touching a session low
of $120.73 by 10:35 a.m. EDT (1435 GMT). U.S. crude in New York
CLc1 lost more than $3.50 to an intraday bottom of $106.05.
 Fund managers said oil could slip below $100 a barrel if
bearish calls like Goldman's were not mitigated quickly by
fresh supply threats out of Libya or the Middle East, which had
driven prices up by 30 percent this year.
 "In commodities, an 8 to 12 percent short-term swing is
always possible, and given that there is such a risk premium
built into oil currently, a drop to somewhere around $98 a
barrel is very feasible," said Oliver Pursche, president at
Gary Goldberg Financial Services in Suffern, New York.
 Pursche, who oversees a commodities mutual fund among more
$500 million in assets managed by the firm, said a deep
correction was also likely to spark bargain-hunting by players
wanting to get back into the market at the lower levels.
 "We've been underweight oil compared to the other energies.
That $98 would be very short-lived in our view and would
probably make us want to add to our position and get to normal
weight on oil."
 Copper fell as investors fretted about softness in demand
from top metals consumer China. Three-month copper on the
London Metal Exchange CMCU3 dropped 2.4 percent and traded at
$9,616 a tonne from $9,855 at Monday's close.
  In U.S. grains markets, corn futures Cc1 were off 2
percent, or almost the daily exchange-set trading limit, as
investors cashed out profits from a recent surge. Wheat futures
Wc1 lost nearly 5 percent, while soybeans Sc1 slid 3
percent.
 Safe-haven gold was down too. Spot gold XAU=, which
reflects trading in bullion, was last off to $1,452.34 an
ounce, having earlier held at a session high of $1,467.10. On
Monday, gold hit a record at $1,476.21.
 Prices at 11:27 a.m. EDT (1527 GMT)                       
                          LAST      NET    PCT     YTD
                                    CHG    CHG     CHG
US crude        CLc1     106.22    -3.69  -3.4%   16.3%
Brent crude     LCOc1    120.90    -3.08  -2.5%   27.6%
Natural gas     NGc1      4.067   -0.041  -1.0%   -7.7%
US gold         GCM1    1449.20   -19.10  -1.3%    2.0%
Gold            XAU=    1448.10   -19.24  -1.3%    2.0%
US Copper       HGK1     436.80    -9.20  -2.1%   -1.8%
LME Copper      CMCU3   9610.00  -245.00  -2.5%    0.1%
Dollar          .DXY     74.976   -0.080  -0.1%   -5.1%
CRB             .CRB    358.550   -7.450  -2.0%    7.7%
US corn         Cc1      754.25   -21.75  -2.8%   19.9%
US soybeans     Sc1     1328.50   -40.00  -2.9%   -4.7%
US wheat        Wc1      760.00   -38.25  -4.8%   -4.3%
US Coffee       KCK1     271.85    -2.75  -1.0%   13.0%
US Cocoa        CCK1    3047.00    25.00   0.8%    0.4%
US Sugar        SBK1      25.83    -0.21  -0.7%  -19.5%
US silver       SIK1     39.850   -0.762  -1.9%   28.8%
US platinum     PLN1    1778.40   -14.40  -0.8%    0.0%
US palladium    PAM1     768.85   -19.40  -2.5%   -4.3%
  (Additional reporting by Amanda Cooper and Zaida Espana in
London and Nick Trevethan in Singapore; editing by Jeffrey
Benkoe)


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