Most energy and metals futures dropped as the U.S. currency rose to a 5 1/2-month high versus the euro earlier today. Russian President Dmitry Medvedev said he ordered a halt to a five-day offensive in Georgia, a country that connects the oil-rich Caspian Sea region with world markets.
Crude oil for September delivery fell $1.44, or 1.3 percent, to settle at $113.01 a barrel at 2:46 p.m. on the New York Mercantile Exchange, the lowest close since May 1. Prices are up 58 percent from a year ago. Oil has slipped 23 percent from a record $147.27 on July 11.
The dollar was little changed at $1.4916 per euro at 3:06 p.m. in New York, from $1.4909 yesterday. It touched $1.4816, the strongest since Feb. 26.
The Standard & Poor's GSCI index of 24 commodities fell as much as 1.4 percent to a four-month low, as metals including lead, zinc and copper slumped. Gold declined for an eighth straight session, the longest slide since 2001. The GSCI index has fallen 22 percent from a record 893.859 on July 3, descending into bear-market terrain.
A fire on the Turkish stretch of the Baku-Tbilisi-Ceyhan pipeline last week halted exports of Azeri Light crude from Azerbaijan via Turkey, forcing the operator, BP Plc, to ship the oil by alternate routes.
BP today said it isn't aware of any damage from bombing to the Baku-Tbilisi-Ceyhan link. Russian warplanes attacked a section of the pipeline today, Kakha Lomaia, head of Georgia's National Security Council, said earlier.
``The troubles in Georgia could potentially cut up to 1 million barrels a day, but hasn't sent prices higher,'' Beutel said. ``This is further evidence that the market isn't trading on the fundamentals anymore. Last month investors were sending prices higher without a fundamental reason and this month we are seeing the reverse.''
Brent crude oil for September settlement dropped $1.52, or 1.4 percent, to settle at $111.15 a barrel on London's ICE Futures Europe exchange, the lowest settlement price since May 1.