Oil Set for Biggest Weekly Drop Since 2004

Crude oil tumbled more than $4 a barrel and headed for its biggest weekly decline since December 2004, pacing a slump in commodities on concern the deepening financial crisis will push the global economy into a recession.

Oil in New York fell to the lowest in a year and copper traded at its weakest since March 2006 after the Dow Jones Industrial Average dropped below 9,000 yesterday for the first time since 2003. Gold rose to the highest in nearly 11 weeks as investors sought the metal as a haven after Asian stocks tumbled.

Crude oil for November delivery fell as much as $4.59, or 5.3 percent, to $82 a barrel on the New York Mercantile Exchange, and was at $82.35 at 2:55 p.m. in Singapore. Crude futures are down more than 12 percent this week, and have dropped 44 percent from a record $147.27 a barrel reached on July 11.

U.S. fuel demand averaged about 18.7 million barrels a day during the past four weeks, the lowest since June 1999, according to an Energy Department report on Oct. 8. The figure is down 8.6 percent from the year-earlier period.

The Organization of Petroleum Exporting Countries, supplier of about 40 percent of the world's oil, signaled yesterday it may cut output at an emergency meeting on Nov. 18.

OPEC resolved at its most recent meeting in Vienna last month to stick more closely to official quotas, implying a cut of about 500,000 barrels a day.

Brent crude oil for November settlement declined as much as $4.06, or 4.9 percent, to $78.60 a barrel on London's ICE Futures Europe exchange, and traded at $79.01 at 2:58 p.m. Singapore time. Prices have fallen 12 percent this week.

Gold for immediate delivery jumped as much as $14.65, or 1.6 percent, to $927.90 an ounce, the highest since July 29. The precious metal traded at $915.50 at 9:37 a.m. in Singapore. Silver for immediate delivery rose 0.8 percent at $12.20 an ounce.

TradingEconomics.com, Bloomberg.com
10/10/2008 5:42:54 AM