Oil retreated from $48.59 a barrel, the highest since Jan. 7, as the faltering world economy may not be able to absorb all of the production from the Organization of Petroleum Exporting Countries. OPEC, responsible for about 40 percent of world supplies, is cutting output 5 percent this month, according to Geneva-based consulting company PetroLogistics Ltd.
Crude oil futures for March delivery fell 78 cents, or 1.7 percent, to $45.69 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange.
Oil advanced in earlier trading after a report from the National Association of Retailers showed that sales of previously owned U.S. homes unexpectedly climbed from a record low, spurring hopes for a stronger economy.
The index of economic indicators gained for the first time in six months, according to a report from the Conference Board.
OPEC and the International Energy Agency have predicted falling demand this year.
Brent crude oil for March settlement dropped $1.53, or 3.2 percent, to $46.84 a barrel on London’s ICE Futures Europe exchange.