Japan's economy contracted 0.4 percent in the third quarter, official figures today showed. China National Petroleum Corp., the biggest producer in the world's second-largest oil consumer, said demand has fallen since September because of the global credit crisis. OPEC may wait until December to cut output, the group's president said.
Crude oil for December delivery dropped as much as $1.44, or 2.5 percent, to $55.60 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $55.83 at 11:11 a.m. in London.
Prices remained lower today even after Royal Dutch Shell Plc and Chevron Corp. announced pipeline disruptions in Nigeria. Shell extinguished a fire at a pipeline that carries crude to the Forcados export terminal. Chevron shut its onshore production in the country after a pipeline breach last week.
Prices declined 6.6 percent last week, touching a 21-month low of $54.67 on Nov. 13, as world equity markets dropped, Germany entered its worst recession in 12 years and U.S. retail sales fell for a fourth straight month.
The International Energy Agency last week slashed its global oil consumption forecast for 2009 by 670,000 barrels a day. Demand will rise 0.4 percent to 86.5 million barrels a day, as growth in emerging nations partly offsets a 1.6 percent contraction in fuel use in developed economies, the Paris-based agency said.
The Organization of Petroleum Exporting Countries is due to release its own monthly market report today.
Brent crude for January settlement dropped as much as $1.24, or 2.3 percent, to $53 a barrel on London's ICE Futures Europe exchange. It was at $53.21 a barrel at 11:06 a.m. London time.
Leaders from the Group of 20 urged a ``broader policy response'' to the financial crisis at a weekend meeting in Washington, citing the potential for additional interest-rate cuts and fiscal stimulus.
Hedge-fund managers and other large speculators increased their net-short position in New York crude-oil futures in the week ended Nov. 11, according to U.S. Commodity Futures Trading Commission data.
Speculative short positions, or bets prices will fall, outnumbered long positions by 52,984 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-short positions rose by 42,441 contracts, or 403 percent, from a week earlier.
OPEC is likely to wait until December before cutting output again, the group's president, Chakib Khelil, said in Algeria yesterday. Saudi Arabia, the world's biggest oil producer and OPEC's largest member, will help alleviate global financial stress by maintaining stable oil markets, King Abdullah said after the meeting of Group of 20 leaders in Washington Nov. 15.
Iran, OPEC's second-largest producer, may seek a production cut of as much as 1.5 million barrels a day when the group meets in Cairo later this month, the Associated Press reported Nov. 15, citing televised comments by the nation's OPEC Governor Mohammad Ali Khatibi.
The group, which pumps about 40 percent of the world's oil, cut output by 1.5 million barrels a day last month. It will have more information on which to make a decision on further cuts at the Dec. 17 meeting in Oran, Algeria, Khelil said yesterday.