Crude oil fell last week as a strengthening dollar curbed the appeal of commodities as a hedge against inflation. Oil has tumbled 23% from the record $147.27 a barrel reached on July 11. The global economic outlook led the Organization of Petroleum Exporting Countries to leave its forecast for 2009 oil demand growth unchanged today at the lowest rate in seven years. The 13-member group left the rate at 1.03% , the narrowest since 2002, even after raising its estimates of daily demand in 2008 and 2009 by 90,000 barrels.

Gasoline demand was down 2.1% in the first seven months of the year as record prices and slower economic growth cut consumer spending, the American Petroleum Institute said Aug. 13. Consumers spent more on gasoline than vehicles and parts for the first time in 26 years in May and June, as U.S. pump prices headed for a record. Crude oil for September delivery fell to $113.77 a barrel. Oil touched $111.34 a barrel, the lowest since May 1, and declined 1.2% last week. Brent crude for October settlement fell to $112.55 a barrel .
Gold fell below $800 an ounce, capping the biggest weekly slide in 25 years, as the dollar surged against the euro, reducing the appeal of the metal as an alternative investment. The metal plunged into a bear market this week, declining as much as 25% from a record $1,033.90 an ounce reached on March 17.Silver dropped as much as 14%. Silver is down 13%, and gold was the fourth biggest after dropping 5.5% . Silver, which has wider industrial applications than gold, has fallen 27% this month as commodities plunged on concern a global slowdown may cut demand for raw materials.

Copper may drop next week, extending the longest selloff in seven years, on speculation slowing economic growth and gains in the dollar will erode demand for the metal used in cars, homes and appliances. Copper for delivery in three months on the London Metal Exchange is down 1.5% this week, heading for the seventh straight weekly decline. Prices dropped for 11 consecutive weeks into mid-August 2001.
Among base metals over the week, copper dipped 0.5% to $7,365 a tonne and nickel rose 2.8% to $18,650 a tonne but aluminium lost 2.4% at $2,790 a tonne.

US stocks climbed modestly on Friday in a quiet session of trading, and made slight gains for the week, as oil prices dropped back and investors digested some positive results from retailers. Over the week, the S&P-500 fought its way to a 0.1% gain – its third in a row. The Dow fell 0.7% while the Nasdaq added 1.4%. The leading equity indices received a boost from a sharp fall in commodity prices. Oil fell with energy sector fell back 1.8% and has now lost ground in seven of the past eight sessions. ExxonMobil and ConocoPhillips gave up 0.5% and 2.2%, respectively.

Kohl’s kicked off the day in positive fashion, reporting second-quarter profit that fell less than expected. The company also forecast full-year profit ahead of previous expectations and the shares rose 7.1%. JC Penney also cheered investors with a smaller- than-expected decline in second-quarter profit. JC Penney shares rose 8.4%. Meanwhile, Abercrombie & Fitch and Nordstrom posted less impressive results but investors were resilient. Abercrombie held steady while Nordstrom rose 4.4%.

In consumer staples, Wal-Mart Stores added 2.2% and Procter & Gamble climbed 2.7%, helping the sector to advance 1%. Reports showing a small uptick in consumer confidence and a bump in manufacturing activity in New York state in August also lifted sentiment. General Electric shares rose 1% while Manitowoc added 4.5% and Paccar climbed 4.8%.

Financials were the biggest losers after another round of writedowns and analyst downgrades and further developments in the auction rate securities fiasco. Goldman Sachs fell 7.5% over the week while JPMorgan lost 8.2% and Bank of America slid 5.6%. On Friday, banks fared better after S&P affirmed the credit ratings of the two largest bond insurers. MBIA and Ambac added 8.7% and 24.6%, respectively, while the sector added 1.1%.
European shares ended the week in negative territory as a sell-off in financials and commodities stocks offset gains for exporters, which were boosted by the strengthening dollar.The pan-European FTSE Eurofirst 300 fell over the week by 0.7%. Sell-off in the commodities sector led the metals stocks lower. French miner Eramet tumbled 11.6% over the week, Austrian steelmaker Voestalpine lost 7.3% while Norsk Hydro, the Norwegian aluminium producer, skidded 4.7%. Germany’s ThyssenKrupp slid 5.7% even though it reported forecast-beating third-quarter results, and Credit Suisse issued a bullish note saying the stock was undervalued.

Banks lost ground, with France’s Societe Generale shedding 5.6% and BNP Paribas falling 5%. Switzerland’s Credit Suisse dropped 5.9% after being fined by UK regulators. Smaller domestic peer Julius Baer lost 2.1%. In Austria, Erste Bank sank 6.1%.
For the week, the Nikkei lost 1.1% , while the Topix declined 1% , a third-straight weekly loss. JR Central dropped 2% after Mizuho analyst Satoru Kunieda lowered the company to ``hold'' from ``buy.'' The analyst also cut target prices on East Japan Railway Co. and West Japan Railway Co., which fell 0.6% and rose 1.2% respectively. Urban Corp., the property developer that this week became Japan's biggest bankruptcy case in six years, slumped 82%, bringing its loss this year to more than 99% . Rival Zecs Co. plunged 13% after it said yesterday there are doubts it can remain as a viable business. Nikon Corp., which also makes chip-etching machines, rose 3.8%, the highest since Jan. 4, while Elpida Memory Inc., Japan's largest memory chipmaker, jumped 6.3%.