Oil Falls More Than $1

Crude oil fell more than $1 a barrel, and gasoline tumbled, as the global economic slowdown cut demand in the largest energy-consuming countries.

China Petroleum & Chemical Corp., supplier of more than half the fuel to the Asian nation, is slashing processing rates by 10 percent from July’s record. U.S. retail sales in October dropped the most on record and Europe fell into its first recession in 15 years, reports showed today.

Crude oil for December delivery declined $1.20, or 2.1 percent, to settle at $57.04 a barrel at 2:42 p.m. on the New York Mercantile Exchange. Futures touched $54.67 yesterday, the lowest since Jan. 30, 2007. Prices, which have tumbled 61 percent since reaching a record $147.27 on July 11, declined 6.6 percent this week.

Gasoline for December delivery fell 6.33 cents, or 4.9 percent, to $1.2391 a gallon in New York, the lowest settlement price since the contract was introduced in October 2005.

China Petroleum, or Sinopec, will process about 15 million metric tons a month, or 3.65 million barrels a day, starting in November, said three refinery officials, who declined to be named because of internal rules. China is the world’s second-biggest oil-consuming country.

Retail sales in the U.S. dropped 2.8 percent in October, the fourth consecutive drop and the biggest since records began in 1992, the Commerce Department said today in Washington. Purchases excluding automobiles also posted their worst performance. The U.S. consumes 24 percent of the world’s oil.

The Organization of Petroleum Exporting Countries, supplier of 40 percent of the world’s oil, is very likely” to recommend a production cut at the end of this month, Iran’s OPEC governor, Mohammad Ali Khatibi, told the country’s state-run Mehr news agency. Iran is OPEC’s second-biggest oil producer.

OPEC will hold a meeting on Nov. 29 in Cairo, according to a spokesman at the group’s Vienna headquarters. It will coincide with a gathering of Arab oil ministers scheduled for that day.

The group decided at a meeting in Vienna last month to lower the production target for 11 of the group’s members by 1.5 million barrels a day, from 28.8 million barrels a day.

Brent crude oil for January settlement fell $2, or 3.6 percent, to settle at $54.24 a barrel on London’s ICE Futures Europe exchange.

TradingEconomics.com, Bloomberg.com
11/14/2008 1:02:44 PM