: oil&energy

||| ENERGY PRICES. After storm threat eases in Gulf of Mexico

Oil drops nearly $4

||| Crude fell below $120 a barrel for the first time since May amid speculation that Tropical Storm Edouard will miss most offshore oil facilities as it approaches the coast of Texas and Louisiana. ||| Futures dropped as low as $119.50. ||| London Brent also touched a new low of $118.80.

Stevenson Jacobs | AP Business Writer

NEW YORK – Oil prices plunged to a three-month low Monday, briefly tumbling below $120 a barrel in another huge sell-off after Tropical Storm Edouard seemed less likely to disrupt oil and natural gas output in the Gulf of Mexico.
Crude's steep drop – prices fell more than $5 at one point during the day – dragged down other commodities from corn to copper and mimicked the big nosedives of the past three weeks, adding to growing beliefs that the oil bubble is at least temporarily deflating.
"What this means is that we're going to see some more relief at the pump. We're probably looking at another 10 cents of downside in retail gas prices," said Tom Kloza, publisher and chief analyst at Oil Price Information Service in Wall, N.J. A gallon of regular gas fell on average about half a penny over-night to $3.881.
Also weighing on oil prices Monday was a report by the U.S. Commerce Department that the country's consumer spending after adjusting for inflation fell in June as shoppers dealt with higher prices for gasoline, food and other items.
Light, sweet crude for Septem-ber delivery fell $3.69, or 2.9 percent, to settle at $121.41 a barrel on the New York Mercantile Exchange. It was crude's lowest settlement price since May 5.
Earlier, prices plummeted to $119.50, the lowest level since May 6. Crude has now fallen in six of the last nine sessions and has shaved 18 percent off its trading record of $147.27 reached July 11.
In London, Brent crude for September delivery fell $3.50 cents to settle at $120.68 a barrel, after earlier falling to a contract-low of $118.80.
Natural gas futures also fell sharply, dropping 66.3 cents, or 7.1 percent, to settle at $8.726 per 1,000 cubic feet. And gasoline futures fell 8.41 cents, or 2.7 percent, to settle at $3.0002 a gallon. Other commodities including gold, copper, corn and soybeans also traded lower. |||

||| COMMODITY EXCHANGES. To be launched by NYMEX

New steel futures contract

The Associated Press

NEW YORK – The New York Mercantile Exchange said on Monday it plans to launch a futures contract for U.S. steel used in automobiles and welded pipe later this year.
The contract for hot-rolled steel coil in the U.S. Midwest will be linked to an index developed by CRU Indices Ltd., a steel industry information service. "Managing price volatility has become a necessity for everyone involved along the steel supply chain and these contracts will assist the U.S. manufacturing industry in dealing with this issue," Richard Schaeffer, NYMEX's chairman, said in a statement.
The contract, prompted by growth in the steel industry, will help manage market risk by providing greater transparency and preventing problems associated with speculation, said a NYMEX spokeswoman, Brenda Guzmán. The U.S. domestic steel sheet market includes about 12 major steel mills that produce more than 50 million short tons of sheet steel annually. Hot-rolled coil represents nearly 20 million tons of that market, NYMEX said. |||

||| INVESTMENT. Vale spends $1.6 billion on them

Orders placed for ore ships

Alan Clendenning | AP Business Writer

SAO PAULO, Brazil – Brazilian mining company Vale has placed a $1.6 billion order for 12 huge iron ore carriers from China's Rong-sheng shipbuilder, and the vessels will be the biggest of their kind in the world, Vale said late on Sunday.
Companhia Vale do Rio Doce S.A. said in a statement that the ships will be used to create a "dedicated route" to ship the company's iron ore from Brazil to Asia, a key market where iron ore is used as the main raw ingredient for steel production. The ships, which Rong-sheng Shipbuilding and Heavy Industries will build for Vale – the world's largest iron ore producer – will have a capacity of 400,000 deadweight tons each.
The ship deal comes on top of a $59 billion investment program through 2013 already promised by Vale.
The first of the ships will be delivered in 2011, and the order should be completed by 2012, allowing Vale "to reduce the cost of long-haul maritime transportation of iron ore to steelmakers," Vale said in its statement. |||