Oil Falls to $93 on Economic Concerns

Oil fell more than $1 a barrel to $93 on Tuesday after data showed a surprise decline in U.S. retail sales, adding to concern that the world's top fuel consumer is heading into a recession.
TradingEconomics.com, Reuters 1/15/2008 6:45:04 AM

Sales at U.S. retailers fell 0.4 percent in December, according to a government report that implied costlier energy and slumping housing prices were taking a toll on consumers.

U.S. crude dropped $1.15 to $93.05 a barrel by 1400 GMT after rising $1.51 on Monday. London Brent eased 87 cents to $92.05.

Concern of a U.S. economic slowdown has prevented oil from repeating its all-time high of $100.09 hit on January 3. Former U.S. Federal Reserve Chairman Alan Greenspan said the U.S. was probably in recession or nearing it.

Oil also eased as Saudi Arabia's oil minister, Ali al-Naimi, said the world's top exporter would raise output when the market needed more crude, responding to a U.S. call for more supply.

U.S. President George W. Bush earlier on Tuesday said an increase in oil output by the Organization of the Petroleum Exporting Countries would help ease the pain of high energy prices.

Saudi Arabia is the de facto leader of OPEC. The producer group, which pumps more than a third of the world's oil and meets on February 1, has said repeatedly it is producing enough oil to meet demand.

The U.S. president joins other leaders who this week have addressed the topic of record oil prices.

Supply disruptions in countries such as Nigeria and political tension in the Middle East limited the decline, while the slumping U.S. dollar supported oil and other commodities such as gold.

The latest snapshot of U.S. crude oil inventories, due out on Wednesday, will help set direction for the market.

Stockpiles were expected to rise by 1.2 million barrels in the week to Friday, according to a Reuters survey. An increase would be the first in nine weeks.