Oil retreated after a Commerce Department report showed that gross domestic product contracted at a 0.3 percent annual pace in the third quarter. Also, UBS AG cut its forecast for oil prices for next year by 43 percent to $60 a barrel from $105 because the global economic slowdown may reduce demand.
Crude oil for December delivery dropped $1.54, or 2.3 percent, to settle at $65.96 a barrel at 2:42 p.m. on the New York Mercantile Exchange. Futures touched $70.60, the highest since Oct. 22. Prices, which have tumbled 55 percent since reaching a record $147.27 on July 11, are down 27 percent from a year ago.
Oil climbed more than $4 a barrel yesterday, the biggest gain in a month, after the U.S. and China, the two biggest energy consumers, cut interest rates to spur economic growth. Prices also rose because the dollar fell the most against the currencies of six major U.S. trading partners since 1998.
U.S. fuel demand during the past four weeks averaged 18.9 million barrels a day, down 7.8 percent from a year ago, an Energy Department report showed yesterday.
The Organization of Petroleum Exporting Countries increased oil supplies 0.5 percent this month because of higher exports from Iraq, according to provisional data from Geneva-based consultants PetroLogistics Ltd.
The group supplied 31.85 million barrels of oil a day in October, up 150,000 barrels a day from September, PetroLogistics founder Conrad Gerber said in a telephone interview today. Higher Iraqi output countered declines from Saudi Arabia, Kuwait and the United Arab Emirates.
OPEC may curb only 850,000 barrels a day of oil supply by January, PFC Energy said in a report today. PFC expects Saudi Arabia to cut 600,000 barrels a day, the Washington-based oil consultant said. OPEC reduced its target by 1.5 million barrels a day after an emergency meeting Oct. 24.
Brent crude oil for December settlement declined $1.76, or 2.7 percent, to settle at $63.71 a barrel on London's ICE Futures Europe exchange. Futures touched $68.35 earlier today, the highest since Oct. 22.
Exxon Mobil Corp. and Royal Dutch Shell Plc, the world's biggest oil companies, posted gains in third-quarter earnings after crude oil's surge to a record made up for slumping output.
Exxon Mobil netted $14.8 billion, up 58 percent from a year earlier, according to a statement today by the Irving, Texas- based company. Profit excluding one-time costs and gains was the highest ever for a U.S. corporation. Shell, based in the Hague, said its net income rose 22 percent to $8.45 billion. Both companies exceeded analyst earnings estimates.