Oil Drops Below $91

Oil slid more than $1 a barrel to below $91 on Wednesday to the lowest in almost a month, pressured by further signs that slowing U.S. economic growth will erode fuel demand.
TradingEconomics.com, Reuters 1/16/2008 6:41:37 AM

The International Energy Agency, adviser to industrialized countries, on Wednesday cut its 2008 global demand growth forecast by 130,000 barrels per day to 1.98 million bpd and said it may lower the figure further.

U.S. crude was down $1.15 at $90.75 barrel by 6:38 a.m. EST and fell as far as $90.60, the lowest since December 20. London Brent crude was down 78 cents to $90.20.

Brent briefly fell below $90 for the first time since mid-December.

Oil in New York has slid from an all-time peak of $100.09 hit earlier this month as concern of a U.S. economic slowdown outweighs tightening stockpiles in major consumer nations.

While lowering its demand forecast, the Paris-based IEA pointed to a further decline in stocks in member-countries of the Organisation for Economic Co-operation and Development.

Even so, weekly data on U.S. inventories due later on Wednesday is expected to show crude inventories rose last week for the first time in nine weeks. The report is due at 10:30 a.m. EST on Wednesday.

President George W. Bush, ending a Middle East tour, has urged Saudi Arabia, the world's top oil exporter and the most influential OPEC member, to help tame soaring crude prices.

OPEC Secretary-General Abdullah al-Badri reiterated on Wednesday that the group was ready to raise supply if justified by fundamentals, but that he did not consider world oil inventories to be low.

But OPEC-member Iran, at odds with the United States, saw no need to increase oil production after the recent drop in prices, its oil minister Gholamhossein Nozari was quoted as saying by the state broadcaster.