Oil, gas and gold prices fall as debt crisis takes toll
THE deepening European debt crisis prompted falls in the prices of oil, gas and gold yesterday.
Oil declined as bids for German bonds fell short of expectations and US durable-goods orders fell, reducing optimism that growth will improve.
Brent crude for January fell as much as $2.21 to $106.82 a barrel. Gold fell yesterday, tracking equity market declines and euro's drop against the dollar as weak Chinese factory data and slowing US consumer spending growth prompted investors to sell the metal.
Gold, which has recently followed riskier assets, came under pressure as the euro slumped to its lowest since early October on signs that the eurozone debt crisis was starting to threaten Germany and France.
Spot gold was down slightly to $1,698.19 an ounce, sharply off an earlier low of $1,677.08.
US gold futures for December delivery were down $3.60 at $1,698.80 an ounce.
Volume was on track to exceed its 30-day norm for a fifth session, preliminary Reuters data showed, reversing a recent trend of weaker turnover.
And UK natural gas declined. Gas for next winter, the six months from October, dropped as much as 1.7pc amid record-high volumes on ICE Futures Europe exchange in London.
Winter gas dropped 1 pence to 70.6 pence a therm. That's equivalent to $10.95 a million British thermal units.
Volumes rose almost fourfold from Tuesday to a record for 2012 of 2,020 contracts.
Winter power dropped 1.9pc to 53.15 pounds a megawatt-hour, according to broker prices compiled by Bloomberg.
Lower oil costs can affect mainland European gas contracts and reduce prices in Britain. Norway's natural-gas production policy means it's limiting supply, Thierry Bros, a Societe Generale SA gas analyst, said yesterday.
He expects Norwegian production to increase five billion cubic metres next year as investors wouldn't look favourably at Statoil ASA, Norway's biggest gas producer, if it continues to reduce output.
Yesterday, gas was stable at 61p a therm.