In a sign of the concern of a global slowdown, the DJ Iron & Steel Index has shed 15.6 percent in the past week. It is the worst-performing of the stock sector indexes tracked by DJ. (See the DJ sector indexes here). The coal stocks index is the second, followed by Industrial Metals & Mining. In fact, of the ten worst performing, only two are directly financial sector indexes and the rest are directly related to commodities, basic materials and transportation.

In the futures market, U.S. November crude settled down $10.52 to $96.37 a barrel, after touching a session low of $95.04 after lawmakers rejected the bailout package.

“This decision is a shock to the system,” said Sarah Emerson, director of Energy Security Analysis Inc. “The oil market is reacting strongly in part because of the implications of a weak economy on demand.”

Crude oil futures sheds close to 4% on the NYMEX. Copper, corn and wheat end lower. But not gold.

Dec gold settles up $6.50 at $8885.0 an ounce.

The ‘gold bugs’ are feeling vindicated by the markets in the past weeks. Gold Anti-Trust Action Committee’s Bill Murphy predicted this week that the Treasury-led bailout plan give a “staggering” boost to gold because it would feed inflation and hurt confidence in U.S. markets, Frank Tang reports.

Gold’s rise above $1,000 an ounce in March was an “I told you so” moment for GATA, Tang writes, noting that that conventional investors view GATA as a conspiracy-theory group, with very little evidence to back up its claim that governments, central banks and commercial banks have colluded to keep the price of gold weak.

(Pictured: Lam Sai Wing, chairman of Hang Fung Gold Technology Group, poses in a washroom decorated with gold and jewellery in his jewellery shop in Hong Kong in this April 24, 2006 file photo. Lam died after a sudden sickness in his home on September 25, 2008 at the age of 53, his company announced on late September 26, 2008. REUTERS/Paul Yeung/Files)

Gasoline shortages in North Carolina, Georgia, Tennessee, and parts of Florida have driven some consumers to desperate measures as they hunt for places to fill up. “Some people are even following tankers to the station and then they descend upon the station,” said Randy Bly, a spokesman for the AAA’s Auto Club South Chapter, Rebekah Kebede and Bernie Woodall report.U.S. gasoline inventories shrunk to the lowest level since 1967 after Hurricanes Gustav and Ike shut Gulf Coast oil refineries. Thursday, Energy Secretary Sam Bodman reiterated that the country was not seeking emergency fuel supplies from abroad.

Elsewhere in commodities:

• The CFTC is probing the silver market, the wsj.com reports. In May of this year, the CFTC released a report finding no manipulation of the market. Yet Stephen Obie, acting director of the agency’s division of enforcement, tells the Journal the CFTC takes “the threat of manipulation in the futures and options markets very seriously and employ a number of measures to prevent, identify and prosecute it.”
• Funding for two iron ore projects in Peru has been delayed because of the global financial crisis, Australian miner Strike Resources Ltd said on its website.

U.S. crude futures are holding near $108 a barrel, as U.S. data shows that refinery utilization dropped to the lowest on record last week in the wake of Hurricane Ike.  Crude stocks dipped by less than expected thanks to the lower demand from refineries.

“The EIA data shows you that demand looks abysmal. The crude import numbers are surprising. Going forward, I see inventories rising,” said Kyle Cooper, director of research at IAF Advisors.

Elsewhere, solar power stocks are rallying after the U.S. Senate voted to extend tax credits worth $18 billion for renewable energy sources.  Also, Energy Sec. Bodman is slated to speak at GridWeek Conference in DC.

Tuesday, Venezuelan President Hugo Chavez (pictured) paid tribute to China’s autocratic late leader Mao Zedong minutes after stepping onto Chinese soil, and said he hoped to build a joint tanker fleet and nearly double oil exports to the world’s number two consumer next year.

The stronger dollar takes the air out an historic surge in crude futures Monday; gold too is off this morning. The spotlight on commodities trading trends continues; the Commodity Futures Trading Commission is reviewing the spike in oil on Monday.

Analysts say the wild swings in commodities prices don’t appear to be the work solely of investment funds, Rene Pastor reports today. “I have no problem with how the markets have acted and continue to act. That is not to say I always like what I see or do not feel the stress of the volatility, I sure do,” Jack Scoville, vice president of brokers the Price Group in Chicago, tells us.

On the plate today:

• Senate Energy Committee hearing on high cost of diesel fuel, witnesses include EIA administrator Howard Gruenspecht and National Petrochemical and Refiners Association President Charlie Drevna
• Senate to vote on legislation extending renewable energy tax credits
• Thin ethanol supplies for the interharvest period in Brazil. Local ethanol prices started to rise.
• Federal prosecutors are looking into possible price-fixing by egg companies and California tomato processors, the Wall Street Journal reports.

 (Pictured: Mukesh Ambani, Chairman of Reliance Industries, holds a jar containing the first crude oil produced from their company’s KG-D6 block in the country’s east coast at a news conference in Mumbai September 21, 2008/REUTERS)

“Short squeeze, crude expiration — that’s it in a nutshell.”

So says Tom Knight of Truman Arnold in Texas of the near 16% surge in U.S. crude for October to $120.92 a barrel. Among other factors in the energy markets today:

* TARP, the Sec. Paulson-led rescue plan for U.S. banks, has changed sentiment for oil, some analysts are arguing. (A 2% rally in gold amid a weaker dollar lends some support to an re-allocation assumption)
* Saudi Arabia trims oil supply to majors
* Nigerian rebels declare unilateral cease-fire
* U.S. oil sector recovering from Ike

How much more to go? “The dollar is down, the stocks are down and now investulators are jumping back into oil,” says Peter Beutel, analyst at Cameron Hanover in Connecticut. More views on the market today are here.

Oil tops $100; Washington’s plans to mop up bad assets bolster oil trading. Yet open the lens a little wider on commodities trends and note that the Reuters-Jeffries CRB index is trading at its lowest level since last October.

“The growth we saw in emerging economies from 2004-2007 was extraordinary — we may not get to that level again,”Tony Dolphin at Henderson Global Investors tells Humeyra Pamuk and Jane Merriman in an analysis on commodities investing trends here.

Meanwhile, Goldman Sachs energy equities analyst Arjun Murti, one of the first to predict $100 a barrel crude, cut his 2009 oil price forecast to $110 from $140 a barrel this week due to global economic weakness.

On the plate today:

•  U.S. Energy Secretary Sam Bodman said the US will not ask members of the International Energy Agency to release emergency gasoline and diesel supplies.
• Venezuela will sign deals to explore gas fields in the Caribbean with foreign companies, including U.S.-based Chevron, in a sign it is open to outside investment despite a wave of energy nationalizations.
• A bill to curb speculation in the oil markets could be too restrictive and reduce liquidity, a spokeswoman for the ICE says.

Gold comes off but oil futures work to recoup $100 and at least one commodities-linked exchange is outperforming as central banks pump money into distressed markets. (Toronto’s benchmark stock index is rising over 2% at this moment. No such luck in Australia overnight and the reeling Russian market remains shuttered)

Still the banks crisis remains a potent presence. Energy trading heavyweight Morgan Stanley elected to withdraw from the Platts benchmark oil trading window in Asia on Thursday, steering clear of a possible test of its credit acceptance among counterparties.

The Australian picks up on a concern the credit crunch squeeze is hitting smaller exchange players, quoting Philip Gotthelf, president of Equidex Brokerage Group that some brokerage houses

“are at 150 per cent of exchange margin. They’re essentially shutting the little guy out completely”. It is harder to buy or sell crude, because “there’s less credit around to do it.”

On the plate today:

• A lack of sufficient investment in new natural gas supplies and delays remain a major problem in most markets, Nobuo Tanaka, IEA executive director says.
• U.S. ethanol makers wrestle with unpredictable corn prices and dwindling cash pile
• MMS releases updated production data from Gulf of Mexico (1800 GMT )

Mining executives gathering this week for the Denver Gold Forum can’t be blamed for keeping at least half an eye on the market. Gold fell sharply earlier today with the sell-off spilling into other precious metals.

Among the companies presenting, Russia’s Polymetal forecast gold output of 250,000 ounces this year, 300,000 ounces in 2009, and 335,000 ounces in 2010, increasing to 460,000 ounces by 2011. More news from Denver here

Of note among some of the other stories for commodities reporters today:

• Argentine farm leaders due to press demands for changes to govt policy in meetings with lawmakers, possible announcements of fresh protests.

•  Hurricane Ike barrels toward southern Gulf Coast. Watching for impact on cotton market now. (Hitting Key West, Fla. in picture on right)

Were the opening ceremonies for the Beijing games the beginning of the end of the commodities rally? This graphic shows that China’s economic growth took off after the International Olympic Committee gave it the nod in 2001. The commodities boom, based on the Reuters/Jefferies CRB Index, can be traced back to around that time as well.

China went on an unprecedented seven-year construction spree to modernize its cities and infrastructure before throngs of athletes, tourists and media members arrived from around the world, stockpiling raw materials to accomplish its makeover.

Building the Olympic facilities and spiffing up Beijing for the cameras was only a drop in the bucket compared to overall growth in China’s economy, but consider that the spectacular National Stadium, known as the Bird’s Nest, required 45,000 tonnes of steel. Over that time, China became the number one consumer of metals and the number two buyer of oil behind the United States.

No one is expecting China to slam on the brakes when the Olympics end. But even a cooling from 10 percent growth a year to 8 percent should have negative consequences for commodity prices, given that demand from the United States and Europe is withering.