Crude oil has dropped below $10 (£6.66) a barrel in London for the first time in 12 years as world commodity prices hit a 21-year low this week.
The Bridge/CRB Commodity Futures Index a basket of 17 leading commodities, from base metals to wheat, closed at 190.48 on Thursday, its lowest level since 1977, with analysts highlighting particular weakness in copper and grains.
On the same day, January Brent blend closed at $9.64 on the International Petroleum Exchange, while the New York Mercantile Exchange benchmark contract dropped to a 12-year low of $10.72.
Analysts said commodities prices continued to suffer from weak demand in the wake of the Asian crisis, and fears of economic difficulties in Europe and North America.
The fall in commodity prices, particularly oil, will help to keep pressure off inflation internationally. In Ireland, a number of reductions in prices at the pumps have already been passed on to motorists and more could be on the way if prices remain at their current levels.
The latest consumer price inflation figures show that prices of fuel and light were steady last month and have dropped by 1.3 per cent on average over the past year.
Oil markets have been depressed by the Organisation of Petroleum Exporting Countries' unwillingness to add to the output cuts of 2.6 million barrels a day agreed earlier this year.
In late trading yesterday, IPE Brent crude was up 17 cents at $9.81, while Nymex crude was up 17 cents at $10.89.
On the London Metal Exchange, three-month copper languished at 11-year lows of just above $1,500 a tonne for most of the week.
Some analysts said there was little chance of improvement until more producers cut supplies. Copper ended at $1,484 yesterday, down $30 on the day and off $35 on the week.
Cocoa fell on the London International Financial Futures and Options Exchange, with the March contract cocoa finishing yesterday down $14 at $926 a tonne, $46 lower than last week's close.
Gold was `fixed` yesterday afternoon in London at $290.80 an ounce against last week's level of $292.30.
On equity markets, profit warnings and the troubles of President Clinton unsettled traders, wiping as much as two per cent off leading European shares and sending safe-haven bonds to record highs.
However, the mood was changing in mid-afternoon trade following news of an unexpected rise in US retail sales.
That boosted European stocks and pulled down Treasuries on hopes Wall Street would rebound from Thursday's slide, though a profit warning from Coca-Cola promised further volatility.
