* Oil prices fall $1, extend Monday's slump
* Resource shares dented, Asia stocks hit 3-week low
* Dollar range-bound ahead of Fed policy meeting
By Rafael Nam
HONG KONG, Aug 5 (Reuters) - Oil and metals prices skidded
on Tuesday toward multi-month lows, denting shares of companies
in the resources sector and sending Asian stocks to their
lowest in three weeks amid deepening fears of a weakening
global economy.
Oil prices fell more than $1 to near Monday's three-month
low below $120 a barrel in a sharp retreat from a record above
$147 touched in mid-July, on signs of rising OPEC output at a
time of declining world demand.
Not even a storm in the Gulf of Mexico prevented the slide
in oil, which comes as a mixed blessing for Asia. Weaker oil
prices provide relief for countries grappling with double digit
inflation, but also confirm suspicions of slowing global demand
-- a bad omen for the export-reliant region.
The dollar got a boost from cheaper oil, though caution
remained ahead of the Federal Reserve's meeting later on
Tuesday. The Fed is expected to leave U.S. interest rates
unchanged, partly due to easing energy prices. []
"At the moment, people are taking the view that the glass
is half-empty, rather than half-full," said Greg Goodsell,
equity strategist at ABN AMRO in Sydney. "Rather than looking
at the positive side, that weaker commodities take the pressure
off inflation, people are seeing it as a product of slower
growth."
U.S. crude futures <CLc1> were down $1.13 at $120.28 at
0250 GMT, after falling on Monday to as low as $119.50, the
lowest level since early May.
OPEC oil supply rose 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, a Reuters survey
showed on Monday. []
The falls in crude prices came even as Tropical Storm
Edouard moved across the Gulf of Mexico, with a 1-in-5 chance
of hitting the Texas coast as a hurricane, according to U.S.
forecasters. []
Metals also slumped, with spot platinum <XPT=> dropping to
its weakest in more than six months on fears of falling demand
from struggling global auto makers. Spot prices fell as low as
$1,530 compared to $1,551/$1,571 late in New York on Monday.
Gold <XAU=> edged down about $2 to $893.50 an ounce.
COMMODITY SHARES SLUMP
The falling prices of oil and metals dented commodity
shares in Asia, with Australian resource firm BHP Billiton Ltd
<BHP.AX> losing almost 6 percent and Japan's oil and gas
developer Inpex Holdings <1605.T> shedding about 4 percent
Asian stock indices overall were broadly weaker as
investors fret about a slowdown in global economic growth. The
MSCI index of Asian stocks outside Japan <.MIAPJ0000PUS> lost
1.5 percent and hit its lowest level in about three weeks.
The resource-heavy Australian index <> slumped 2
percent, while the Hong Kong index <> lost 1.8 percent and
shares in Taiwan <> dropped 2.1 percent.
Tokyo's Nikkei average <> swung between gains and
losses, and was last up about 0.3 percent. Falls in
commodity-related shares were offset by gains in exporters such
as Honda Motor <7267.T> that benefit from a weaker Japanese
yen.
The dollar was range-bound at around 108.20 yen <JPY=>,
near a six-week high of 108.39 yen hit last week. The euro,
however, dipped to about $1.5525 <EUR=>, nearing last week's
six-week low of around $1.5510.
Speculation that the Reserve Bank of Australia, which meets
on Tuesday, could highlight risks to the economy and pave the
way for monetary easing knocked the Australian dollar <AUD=> to
nearly four-month lows against the U.S. dollar.
The Australian central bank's interest rate decision is due
at 0430 GMT.
