Oil Falls

Crude oil fell more than $2 a barrel on speculation OPEC will be unable to boost prices as the global recession curbs demand faster than the group can cut production.

The Organization of Petroleum Exporting Countries is determined” to stabilize oil markets, Saudi Oil Minister Ali al-Naimi told reporters in Doha, Qatar, yesterday. Japanese crude-oil imports tumbled 17 percent to 3.71 million barrels a day last month, according to a report from the finance ministry.

Crude oil for February delivery fell $2.44, or 5.8 percent, to $39.92 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Prices have dropped 73 percent from a record $147.27 on July 11.

Oil and energy ministers from the six Gulf Cooperation Council countries met in the Qatari capital. Saudi Arabia, Kuwait, Qatar, and the United Arab Emirates are the members of OPEC. The Gulf Cooperation Council’s other two members are Oman and Bahrain.

South Korea’s consumption of oil products declined 12.4 percent in November from a year earlier. The country used 60.3 million barrels of refined products, data from state-run Korea National Oil Corp. showed today.

Japan is the world’s third-biggest oil importer after the U.S. and Germany, according to the U.S. Energy Department. South Korea is the fifth-biggest importer.

U.S. supplies rose in 11 of the past 12 weekly reports from the Energy Department as consumption dropped. Inventories probably rose 900,000 barrels last week, according to the median of analyst responses in a Bloomberg News survey. The department is scheduled to release its next report on Dec. 24 at 10:35 a.m. in Washington.

January futures, which expired last week, plunged 6.5 percent to $33.87 a barrel on Dec. 19, the lowest settlement for a contract closest to expiration since Feb. 10, 2004. Oil is down 27 percent in December.

Brent crude oil for February settlement declined $2.68, or 6.1 percent, to $41.32 a barrel on London’s ICE Futures Europe exchange.

TradingEconomics.com, Bloomberg.com
12/22/2008 11:56:36 AM