Oil prices slip 2% after bin Laden’s death

By Blake Ellis, staff reporterMay 2, 2011: 7:32 AM ET

NEW YORK (CNNMoney) — Oil prices slipped early Monday, as investors breathed a sigh of relief following news that U.S. forces had killed al-Qaeda leader Osama bin Laden.

Crude for June delivery fell $2.07, or nearly 2%, to $111.86 a barrel in early morning trading.

The declines came as Wall Street cheered the announcement that bin Laden, a mastermind of global terrorism, was killed in Abbottabad, about 31 miles north of the Pakistani capital of Islamabad.

President Barack Obama announced the death late Sunday, and officials said early Monday that bin Laden’s body has been buried at sea. The news sent stock futures sharply higher in pre-market trading.

National security concerns and terrorist threats typically lead to higher commodity prices, as investors duck out of the stock market. Oil prices had risen recently as investors worried about potential supply disruptions — with prices spiking during the past month as violence in Libya continues to escalate.

Monday’s sell-off may be short-lived.

Gold, which is typically seen as a safe haven during times of uncertainty, already recovered initial losses. After dipping in overnight trading, gold futures for June delivery rose 70 cents to $1,557.10 an ounce, after hitting an intraday high of $1,577.40 an ounce.

Meanwhile, silver prices sold off sharply, dropping 6% after some early heavy selling. According to news reports, there had been one big sell order that triggered the drop.