NEW YORK (Dow Jones/AP) – Oil prices plunged here Wednesday as concerns high prices will hurt demand overpowered a brief rally sparked by reports of a big drop in U.S. gasoline inventories last week.
“All the doom and gloom about demand and the effects of high prices is playing into it, and the funds have decided to take profits,” Phil Flynn, an analyst at Alaron Trading Corp. in Chicago, said. “The market has gone pretty straight up from mid-July and was probably due for a correction anyway.”
The September crude contract on the New York Mercantile Exchange closed at $63.25 a barrel, down $2.83.
September gasoline settled at $1.8910 a gallon, 9.26 cents lower on the day. September heating oil slid 8.01 cents to settle at $1.7839 a gallon.
Concerns about demand were heightened by a U.S. Labor Department report showing an unexpectedly large increase in wholesale prices and an American Petroleum Institute report showing a big decline in U.S. oil demand last month.
In addition, Wal-Mart Stores Inc., the world’s biggest retailer, reported earlier in the week that its profits grew in the most recent quarter at their slowest rate in four years and blamed costly gasoline in part.
September natural gas fell 36.1 cents to close at $9.380 per million British thermal units.
Gold futures got pummeled on the Nymex Wednesday, declining with the euro and crude oil. Silver and platinum followed. Unlike gold, however, these metals avoided technically induced selling as they held at or above the previous day’s lows.
The most-active December gold contract fell $6.30 to $445.20 an ounce.
September silver settled at $6.993 an ounce, down 5 cents.
October platinum settled at $889.50 an ounce, down $3.20.
The September copper contract settled down 5.75 cents to $1.6570 per pound. December copper fell 5.15 cents to $1.6030 per pound.
Arabica coffee futures ended higher on the New York Board of Trade, recovering from a breach of Tuesday’s lows.
The September contract settled 0.85 cent higher at 97.75 a pound, and December closed up 0.90 cent at $1.0235 a pound.
The most-active December cocoa futures contract settled $11 lower at $1,372 a metric ton.
World raw sugar futures for October settled up 0.16 cent at 9.78 cents a pound.
Chicago Board of Trade September corn settled up 3.50 cents at $2.13 per bushel after slipping to a new contract low of $2.0825.
November soybeans ended 0.25 cent lower at $6.2475 a bushel.
September wheat settled up 4 cents at $3.1425 a bushel.
AP-ES-08-17-05 1730EDT
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