Copper Falls in N.Y. as Oil Drops, U.S. Jobless Claims Rise
By Millie Munshi
Sept. 4 (Bloomberg) -- Copper fell after oil prices retreated and U.S. jobless claims rose, increasing concern that slower economic growth will erode demand for the metal.
Crude oil slumped for a fifth straight session, reversing an earlier advance and reducing the appeal of commodities as a hedge against inflation. Initial claims for jobless benefits rose to 444,000 in the week ended Aug. 30, the U.S. Labor Department said today. Copper has tumbled 23 percent from a record in May on concern demand will decline.
``We had some pretty lousy jobs numbers today and oil came back down, which pressured copper,'' said Matthew Zeman, a trader at LaSalle Futures Group in Chicago. ``There are still some pretty big demand concerns out there.''
Copper futures for December delivery fell 4.6 cents, or 1.4 percent, to $3.266 a pound on the Comex division of the New York Mercantile Exchange.
Crude-oil futures for October delivery lost as much as 2.6 percent to $106.52 a barrel on Nymex. Oil prices dropped 6.9 percent in August, the second straight monthly drop.
Concern that global growth will slow and signs that inflation may not accelerate as much as forecast spurred a rout in commodity prices for the past two months. The Reuters/Jefferies CRB Index of 19 raw materials lost 5.9 percent in August, after tumbling 10 percent in July.
``With the global economy looking weak, you have a situation where it's hard to see any good improvement for copper demand,'' William O'Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said Sept. 2.
Earlier, copper gained as much as 1.2 percent as crude oil rose as much as 1.1 percent before retreating.
``Copper is trying to stabilize today,'' said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. ``Copper has been in extremely oversold conditions and was looking for any reason to rally. With economic indicators looking worse, it's hard for the bulls to make a case.''
On the London Metal Exchange, copper for delivery in three months fell $124, or 1.7 percent, to $7,226 a metric ton ($3.28 a pound). The price has gained 8.3 percent this year.