Aluminum fell the most in more than a week as slumping oil prices signal lower costs to produce the energy-intensive metal. Nickel rose.

Aluminum Drops After Oil Prices Slump to Lowest in Four Years

Aluminum Drops After Oil Prices Slump to Lowest in Four Years

While crude is not the primary source of energy for the aluminum producers, energy accounts for about 30 percent of output costs and falling oil prices may have a deflationary impact, according to Macquarie Group Ltd. OPEC took no action to ease a global supply glut, sending Brent and West Texas Intermediate futures to the lowest in more than four years.

“The entire commodity complex is having a reaction to crude and the U.S. dollar strength,” Bart Melek, the head of commodity strategy at TD Securities in Toronto, said by e-mail. “There is that potential on the headlines and less Petro dollars available to invest in the commodity space.”

Aluminum for delivery in three months fell 0.8 percent to settle at $2,044 a metric ton on the London Metal Exchange, the biggest loss since Nov. 18.

Nickel gained for the first time in three days as the Philippines moved closer to an ore export ban that could tighten supply. Prices rose less than 0.1 percent to $16,355 a ton.

The natural resources committee of the Philippine House of Representatives approved in principle a mineral ore export ban yesterday. Similar restrictions by Indonesia since January pushed nickel up 18 percent this year, making it the biggest gainer on the LME.

Copper for three-month delivery slipped 0.2 percent to $6,557.50 a ton in London. Floor trading on the Comex in New York was closed today for the Thanksgiving Day holiday.

“It is clear that the ‘input’ costs of oil should lower the cost of production of some commodities and hence make the floor of those prices lower,” Societe Generale SA said this week.

Tin, lead and zinc fell in London.