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Oil Falls on Lower Demand, Cotton Rises as Demand Climbs

January 28, 2011 at 3:33 by Vladimir Vyun

Crude oil fell as rising numbers of jobless claims in the US caused concerns that demand for a fuel may wane. Claims for unemployment benefits rose from 403,000 to 454,000 in the US last week. Oil also weakened as the US crude oil inventories increased by 4.8 million, while they were expected to increase by only 0.9 million. March delivery for crude oil dropped $0.47 (0.6 percent) to $85.17 per barrel on NYMEX. So far, prices were down 6.6 percent this year.

Cotton futures jumped to the record as supply struggles to catch up demand from China. China imported 2.84 million metric tons last year, the most since the record of 3.47 million tons in 2006. March delivery for cotton rose as much as $0.0256 (1.5 percent) to $1.6939 per pound on ICE by 14:58, following the previous jump to the record $1.7283 per pound. Prices have more than doubled in the last year.

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