Oil prices fall after drop in metal commodities

Wednesday 20 February 2013 18.15
Oil was dragged down by a sell-off of precious metal commodities
Oil was dragged down by a sell-off of precious metal commodities

The price of oil has fallen, as a drop in metals commodities overflowed to crude markets and stocks retreated from five-year highs.

Benchmark crude for April delivery dropped $2.14, or 2.2 percent, to $94.96 a barrel in midday trading on the New York Mercantile Exchange.

The March contract, which expires today, fell $2.07 to $94.59 per barrel.

Brent crude, used to price many international varieties of oil imported by US refineries, fell $1.54 to $115.98 a barrel in London.

Gold and other precious metals tumbled in trading, and oil was dragged down by the commodities sell-off.

Gold was down about $22 to $1,582.40 an ounce. Silver was off more than 2% and platinum lost more than 3%.

The stock market backed off as well, with the major indexes slightly lower at midday.

The Commerce Department said housing starts slowed in January from December, although applications for building permits continued to rise, pointing to more recovery for the housing market this year.

Many analysts expected the decline in January starts after a sharp rise in December, with most of the drop in apartment construction. Single-family home starts were slightly higher last month.

Oil prices were undercut by analysts' expectations for higher US crude supplies when the Energy Department's Energy Information Administration releases its weekly inventory report tomorrow.

Analysts on average forecast a rise of 2 million barrels, according to Platts, the energy information arm of McGraw-Hill Cos.

Keywords: oil, brent