Oil Falls

Crude oil fell to the lowest in almost 22 months on forecasts that a report will show U.S. oil supplies increased for an eighth week as a recession erodes global demand.

Stockpiles probably climbed 1 million barrels in the week ended Nov. 14, according to the median of 11 analyst estimates before an Energy Department report tomorrow. The Organization of Petroleum Exporting Countries, the International Energy Agency and U.S. Energy Department slashed demand projections this month.

Crude oil for December delivery fell 62 cents, or 1.1 percent, to $54.33 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Prices touched $54.03, the lowest since Jan. 30, 2007. Futures have dropped 63 percent since reaching a record $147.27 on July 11.

Gasoline for December delivery fell 3.96 cents, or 3.4 percent, to $1.135 a gallon in New York. Futures touched $1.13, the lowest since the contract was introduced in October 2005.

U.S. inventories of gasoline and distillate fuel, a category that includes heating oil and diesel, also rose, according to the survey. It would be the seventh gain in gasoline supplies in eight weeks.

Prices rose earlier as a hijacked Saudi Arabian supertanker was anchored close to the Somalian coast. Pirates directed the Sirius Star, the largest merchant ship ever seized, to the Eyl coastal area to the north of Somalia, the U.S. Navy said today. The vessel is filled with 2 million barrels of crude oil.

Brent crude oil for January settlement declined 65 cents, or 1.2 percent, to $51.66 a barrel on London’s ICE Futures Europe exchange.

TradingEconomics.com, Bloomberg.com
11/18/2008 12:23:32 PM