Added to the picture, revised data revealed that the US economy shrank a steep 2.9 per cent in the first three months of 2014, sharply worse than the previous estimate of a 1pc decline.
Oil: The oil market fell as weak data stoked fresh demand fears in top consumer the United States, while Iraqi crude supplies appeared unaffected by ongoing violence, analysts said.
Consumer spending, which accounts for more than two-thirds of US economic growth, rose a mere 0.2pc in May after flattening in April, official data showed.
In addition, initial US jobless claims, a sign of the pace of layoffs, totaled 312,000 in the week ending June 21, a decrease of just 2,000 from the previous week.
And American oil inventories unexpectedly rose by 1.7 million barrels in the week ending June 20. That dashed analysts’ forecasts for a 1.2m-barrel decline, indicating weakening demand.
“As a result of the weaker data and the build in crude stocks ... investors are all of a sudden refocusing their attention on the demand side of things,” said analyst Fawad Razaqzada at trading site Forex.com.
“They are realising that demand is simply not strong enough to justify oil prices at these elevated levels.” New York oil prices had been lifted on Wednesday by a report suggesting that Washington will ease a decades-old ban on crude exports.
Late last week, meanwhile, oil prices had hit nine-month peaks on the back of Iraqi unrest.
“Both crude benchmarks slipped over the past week, correcting lower in small-scale profit-taking,” added VTB Capital analyst Andrey Kryuchenkov. “Importantly, despite ongoing violence in Iraq, supplies remain largely unaffected by the militant advance.”
Iraq’s Prime Minister Nuri al-Maliki conceded Thursday that political measures are needed alongside military action to repel a Sunni insurgent offensive that is threatening to tear the country apart.
Despite ongoing supply fears over violence in Iraq — the second biggest Opec producer after Saudi Arabia — the nation’s oil output has yet to be impacted.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in August fell to $113.18 a barrel compared with $114.66 one week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for August sank to $105.55 a barrel compared with $107.13 a week earlier.
Gold climbs on Iraq
Precious metals: Haven investment gold continued to climb on stubborn geopolitical worries in Iraq and Ukraine, hitting a two-month peak of $1,325.92 an ounce on Tuesday.
“With geopolitical tensions in places like Ukraine, Syria and Iraq unlikely to end soon, demand for a safe haven asset could stay well supported for a considerable period of time,” said Capital Spreads dealer Jonathan Sudaria.
Sister metal silver also pushed higher to strike a three-month high at $21.20 an ounce.
By Friday on the London Bullion Market, the price of gold rose to $1,317.50 an ounce from $1,312.50 a week earlier.
Silver increased to $21.04 an ounce from $20.62.
On the London Platinum and Palladium Market, platinum climbed to $1,479 an ounce from $1,456.
Palladium advanced to $839 an ounce from $829.
Base metals: Most prices rose, with zinc striking another 16-month peak at $2,198 a tonne, after upbeat data in China — which needs vast supplies of commodities to power its growth.
HSBC said its purchasing managers index (PMI) of Chinese manufacturing came in at 50.8 this month, up from a final reading of 49.4 in May. Anything above 50 points to growth and anything below suggests contraction.
“A stronger-than-expected Chinese HSBC Flash Manufacturing PMI has given the base metals complex a boost and underscored the effect of the government’s mini-stimulus measures to help stabilise China’s flagging economy,” said Standard Bank analyst Leon Westgate.
The latest figure is the first time the reading has come in above 50 since December’s 50.5, and will raise hopes that a slowdown in the world’s second biggest economy has bottomed out.
By Friday on the London Metal Exchange, copper for delivery in three months climbed to $6,956 a tonne from $6,779.75 a week earlier.
Three-month aluminium eased to $1,886 tonne from $1,894. Three-month lead grew to $2,166 a tonne from $2,146. Three-month tin slipped to $22,315 a tonne from $22,650. Three-month nickel advanced to $18,825 a tonne from $18,523. Three-month zinc increased to $2,187 a tonne from $2,172.25.
Cocoa loses steam
Cocoa: Prices slipped from three-year highs struck the previous week, as traders eyed favourable weather conditions in key producing nations.
“The growing weather has been very good for the mid-crop and this allow for a large harvest and should create further pressure on the futures market,” said Citi analyst Sterling Smith.
By Friday on LIFFE, London’s futures exchange, cocoa for delivery in September eased to £1,924 a tonne from £1,928 a week earlier.
On the ICE Futures US exchange, cocoa for September slid to $3,108 a tonne from $3,116 a week earlier.
Coffee: Prices advanced amid ongoing supply concerns. “Arabica moved higher on the day as worries about the state of the crop is providing support to the market,” said Citi analyst Sterling Smith.
On ICE Futures US, Arabica for delivery in September rose to 181.30 US cents a pound from 170.50 cents a week earlier.
On LIFFE, Robusta for September climbed to $2,036 a tonne from $1,978 a week earlier.
Sugar: The market weakened despite supply worries in key producer Brazil.
“Despite some rainfall, many areas of Brazil are still too dry, which is expected to further reduce crop yields in the harvest that is currently underway,” said Commerzbank analysts.
By Friday on LIFFE, the price of a tonne of white sugar for delivery in August receded to $483.10 from $488.50 a week earlier.
On ICE Futures US, the price of unrefined sugar for October declined to 18.55 US cents a pound from 18.63 US cents a week earlier.
Rubber: Prices in Kuala Lumpur strengthened further, supported by expansion in China’s factory activities.
The Malaysian Rubber Board’s benchmark SMR20 rose to 178.65 US cents a kilo from 173.60 cents a week earlier.
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