Oil slips on rise in US fuel stocks, gold prcies down too

Platinum group metals, which include palladium, rallied as improving US car sales and a better economic outlook triggered fund buying in the metals widely used for purifying auto emissions.

The Thomson Reuters-Jefferies CRB index ended down 0.2 percent for a second straight day after 8 of the 19 markets on the commodities bellwether fell and two others closed flat.

Natural gas was the largest loser on the CRB, falling 3.3 percent on fairly mild near-term weather forecasts in the United States. Bearish U.S. government data this week on gas production also pressured gas prices.

Since the new year began, markets have largely traded sideways held in check by worries of another impending political battle over U.S. fiscal issues.

Markets were on tenterhooks through December, as opposing lawmakers in Congress grappled to reach a deal to avert tax increases and spending cuts that economists warned could push the U.S. economy back into recession.

While a fiscal agreement was reached at the last minute, many lawmakers and their aides fear things may get more toxic in bitter struggles expected in the next few months over the nation's debt and deficit burdens. At stake is the US government's ability to get its finances under control and whether it might default on debts and suffer further downgrades in the U.S. credit rating.

On the optimistic side, some analysts

... contd.