Copper fell the most in three months on concern that the surging cost of oil may slow economic growth, curbing demand for the metal used in wires and plumbing.
Oil jumped to the highest price in more than two years in New York as intensifying violence in Libya, the holder of Africa’s largest crude reserves, fueled concern that supplies may be disrupted. Equity markets declined around the world.
“Today’s selling in metals is largely attributable to the fear that the surge in oil prices will inevitably lead to bouts of higher inflation and interest rates, resulting in slower growth down the road,” Edward Meir, a senior commodity analyst at MF Global Holdings Ltd. in Darien, Connecticut, said in a report.
Copper futures for May delivery dropped 13.3 cents, or 3 percent, to close at $4.363 a pound at 1:28 p.m. on the Comex in New York, the biggest decline for a most-active contract since Nov. 16. Yesterday, U.S. markets were closed for a public holiday.
“It’s really a function of risk aversion that is becoming a bigger factor as we see more conflict in the Middle East, particularly Libya,” said Daniel Brebner, an analyst at Deutsche Bank AG in London. “Oil prices are rising, and there may be some result in lower growth.” （Bloomberg）