Oil, which has followed movements in equity markets this month as the credit crisis deepened, fell as European stocks dropped today. The Organization of Petroleum Exporting Countries slashed its 2009 demand forecast for a second month as the worst financial crisis since the 1930s threatens a global recession. The International Energy Agency and the U.S. Energy Department have also cut their forecasts.
Crude oil for November delivery fell as much as $3.66, or 4.7 percent, to $74.97 on the New York Mercantile Exchange, the lowest since Aug. 31, 2007. It traded at $75.97 a barrel at 1:53 p.m. London time.
Prices, down 12.7 percent from a year ago, have dropped 48 percent from the record $147.27 a barrel on July 11.
OPEC, supplier of more than 40 percent of the world's oil, cut its forecast today for oil demand next year by 450,000 barrels a day, or 0.5 percent, to 87.21 million barrels a day. The 13-member group will hold an extraordinary meeting on Nov. 18 in Vienna, after a decision to trim excess supplies last month failed to stem a slump in prices.
A government report tomorrow may show that U.S. crude-oil and gasoline inventories rose last week, according to the median of responses by analysts in a Bloomberg News survey. The report will be released a day late because of the Columbus Day federal holiday Oct. 13 in the U.S.
Brent crude oil for November settlement fell as much as $3.55, or 4.8 percent, to $70.98 a barrel on London's ICE Futures Europe exchange. It traded at $71.23 at 1:28 p.m. local time.
The November Brent contract expires tomorrow. The more- active December futures were at $73.24 a barrel, down $3.14, at 1:29 p.m. London time.
Energy producers are still restoring oil production in the U.S. Gulf Of Mexico after platforms were shut down because of hurricanes Gustav and Ike. Producers have resumed about 61 percent of oil output and 63 percent of natural-gas output, the U.S. Minerals Management Service said in a statement on its Web site.
The Gulf of Mexico accounts for 26 percent of U.S. oil production and 14 percent of gas output. The Gulf normally produces about 1.3 million barrels of oil and 7.4 billion cubic feet of gas a day, according to the Minerals Management Service, which is part of the U.S. Interior Department.