US crude futures were down $1.23 at $120.18 at 0600 GMT on Tuesday after as the monthly US commerce department survey showed consumer spending, which fuels two-thirds of output, had cooled in June while inflationary pressures accelerated.
The US is the world’s biggest energy user and any signs of slowing consumer spending usually weigh on global oil demand projections.
A Reuters survey on Monday showed oil supply from the Organisation for Petroleum Exporting Countries had increased for a third consecutive month in July due to higher output from the world’s top exporter Saudi Arabia and smaller increases from other members.
Spot platinum has dropped to as low as $1,530.00 an ounce, its weakest in more than six months, from $1,551/$1,571 late in New York on Monday, on fears of falling demand from struggling car manufacturers.
Gold edged down about $4 to $890.95/892.00 an ounce.
The falling prices of oil and metals dented commodity shares in Asia, with Australian resource firm BHP Billiton Ltd losing six per cent and Hong Kong-listed oil offshore producer CNOOC down 5.4 per cent.
“Global slowdown worries have prompted an unwinding in the commodities market, which in turn has spurred a sell-off in commodity-linked stocks,” Steven Leung, director with UOB Kay Hain in Hong Kong, said.
“If the US dollar continues to advance we will see commodity stocks taking further hits in the short term.”
The resource-heavy Australian index fell 1.4 per cent, while the Hong Kong and Taiwan indexes dropped more than two per cent each.
“Slowing demand and the hope for more supply is weighing on the market even as the geopolitics and the weather is getting wild,” Phil Flynn, an analyst from Alaron Trading, referring to concerns over Iran’s nuclear programme and Tropical Storm Edouard massing in the Gulf of Mexico.