Thu Jun 28, 2012 3:14pm EDT
* US crude ends below $78 amid doubts about EU summit
* Copper down too, heads for worst quarter since Q3 2011
* Gold slips 1.6 pct on day on signs of no Europe stimulus
By Barani Krishnan
NEW YORK, June 28 (Reuters) – Oil prices fell by up to 3 percent on Thursday and copper and gold prices slumped too as traders and investors expect an ongoing summit of European leaders to do little to resolve the region’s debt crisis.
A sell off in Wall Street shares after a U.S. Supreme Court decision to uphold key elements of President Barack Obama’s healthcare reform law also pressured oil. The dollar’s strength against the euro added to the weight on commodities.
Corn, wheat and soybeans were among the markets relatively unscathed by the selling as investors and traders continued to pin hopes of a sharp drop in production of such crops from the heat wave searing the U.S. Midwest grain belt.
The Thomson Reuters-Jefferies CRB index, a global benchmark for commodities, fell 1.3 percent, pulled down by the slide in energy markets, including natural gas, and most metals.
Percentage-wise, it was the sharpest drop in a week for the 19-commodity CRB, coming after four straight sessions of gains for the index that had indicated to some that commodities may have bottomed out after a recent round of aggressive selling.
U.S. crude oil, which makes up nearly a quarter of the CRB’s weighting, fell its most in a week, settling down $2.52 at $77.69 a barrel.
In London, the benchmark Brent crude oil fell more than $2 to a session low of $90.88.
Traders blamed the drop in oil prices largely on pessimism that the European Union summit in Brussels would find a cure to the festering debt problems of Spain and Italy, let alone the rest of Europe.
“Nobody in the world has a solution to Europe, and if they did, they would have stepped forward by now,” said Adam Sarhan, chief executive at Sarhan Capital, a New York-based financial advisory that regularly comments on commodity markets.
“Until we find a unified solution to this … a solution that can be implemented across the board, we’re going to see a continued threat to the global economy,” Sarhan said.
Copper fell for the first time in four days as EU leaders opened their two-day summit divided as ever on how to solve the crisis, with Germany showing little willingness to back other countries’ debts as finance officials work on short-term ways to stabilize Spanish and Italian borrowing costs.
The London Metal Exchange’s benchmark three month copper fell $20 to end at $7,385 a tonne, surrendering an earlier rally in Asian trade to $7,449.50.
In New York, the most-active U.S. copper futures contract, September, shed 2.50 cents to settle at $3.3315 per lb.
Copper is on track for its worst quarterly performance since the third quarter of 2011, down nearly 13 percent in the past three months.
Gold fell as the stronger dollar weighed on the precious metal. Investors in bullion were also frustrated by the unlikeliness that the EU summit would produce additional stimulus for Europe that will boost inflation and gold prices.
The spot price of gold, which tracks trades in bullion , was down 1.6 percent at $1,549.30 an ounce by 1:23 p.m. EDT (1723 GMT), having earlier hit a four-week low at $1,547.39.
U.S. gold futures for August delivery were down $28.50 at $1,549.90, with trading volume sharply below the 30-day average, preliminary Reuters data showed. (Editing by David Gregorio and Bob Burgdorfer)