Oil Falls More Than $2 as Slower U.S. Economy May Curb Demand


Crude oil fell more than $2 a barrel on forecasts for reduced U.S. consumer spending and on slowing growth of oil imports in China.

Rising fuel costs may have slowed retail spending growth in the U.S., the world's largest oil user, to a four-month low in October, according to a Bloomberg survey. China's October oil imports fell to the lowest since February as crude-oil prices rose to records. China is the second-biggest oil consumer.

Crude oil for December delivery fell $2.17, or 2.3 percent, to $94.15 a barrel at 11:36 a.m. on the New York Mercantile Exchange. Futures climbed to $98.62 on Nov. 7, the highest intraday price since trading began in 1983. Prices are up 58 percent from a year ago.

Brent crude oil for December settlement fell $1.63, or 1.8 percent, to $91.55 a barrel on the London-based ICE Futures Europe exchange. Brent reached $95.19 a barrel on Nov. 7, the highest since trading began in 1988.

Saudi Oil Minister Ali al-Naimi and Kuwait's acting oil minister said that OPEC may discuss an output boost, Agence France-Presse reported yesterday. Saudi Arabia is the group's largest producer and the world's top oil exporter.

The Organization of Petroleum Exporting Countries has no plan to discuss raising production targets at its Heads of State Summit in Riyadh on Nov. 17-18, oil officials from Iran and another Persian Gulf state said.

The group, which produces 40 percent of the world's oil, will discuss output during a Dec. 5 ministerial-level meeting in Abu Dhabi, United Arab Emirates, Iran's OPEC governor, Hossein Kazempour Ardebili, told the state-run Islamic Republic News Agency today.

Hedge fund managers and other large speculators raised their bets on rising prices to a three-month high in the week ended Nov. 6, according to U.S. Commodity Futures Trading Commission data. Their net-long position, the difference between orders to buy and sell oil, rose 27 percent to 22,696 contracts, the commission said.

Investors pushed prices higher the past five years as they poured money into energy because returns outpaced those of financial markets.


TradingEconomics.com, Bloomberg
11/12/2007 10:59:14 AM