OPEC said it will use the time to gauge the impact of a 1.5 million-barrel-a-day reduction agreed to in October. The group will trim production at its next meeting, its secretary general said today. Slowing growth means demand will be much lower” than expected a month ago, OPEC said after a Nov. 29 gathering.
Crude oil for January delivery declined $5.05, or 9.3 percent, to $49.38 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures are heading for the biggest one-day drop since Oct. 10.
Oil prices have tumbled 66 percent since reaching a record $147.27 on July 11 as the U.S., Europe and Japan face their first simultaneous recession since World War II.
Gasoline for January delivery declined 9.5 cents, or 7.9 percent, to $1.1146 a gallon in New York.
Pump prices have followed futures lower. Regular gasoline, averaged nationwide, dropped 0.5 cent to $1.82 a gallon, AAA, the largest U.S. motorist organization, said on its Web site today. It’s the lowest price since January 2005. The fuel has tumbled 56 percent from the record $4.114 a gallon reached on July 17.
OPEC ministers put off debate on a second cut in output in as many months during the Nov. 29 meeting in Cairo. The group will reduce crude production when it meets in Oran, Algeria, this month, OPEC Secretary General Abdalla el-Badri said. Oil demand is likely to drop further next year, he said.
Prices around $75 a barrel would be fair” and would support investment in new fields, Saudi Arabian Oil Minister Ali al-Naimi said over the weekend. The global market is oversupplied by more than 2 million barrels a day, Iranian Oil Minister Gholamhossein Nozari said yesterday.
The U.S. economy entered a recession in December 2007, the panel that dates American business cycles said today. The declaration was made by the National Bureau of Economic Research, a private, nonprofit group of economists based in Cambridge, Massachusetts. The last time the U.S. was in a recession was from March through November 2001, according to NBER.
Brent crude oil for January settlement fell $5.28, or 9.9 percent, to $48.21 a barrel on London’s ICE Futures Europe exchange.