Oil falls to near $53 as US demand outlook worsens

Oil falls to near $53 as US demand outlook worsens
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First Published: Thu, Nov 27 2008. 10 20 AM IST
Updated: Thu, Nov 27 2008. 10 20 AM IST
Singapore: Oil prices fell to near $53 a barrel on Thursday in Asia as dismal US economic data and rising crude inventories outweighed the possibility of production cuts by Opec and Russia.
Light, sweet crude for January delivery was down $1.18 to $53.26 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore.
Prices have hovered just above three-year lows this week as bad economic news painted a bleak picture of US demand for crude.
The Commerce Department on Wednesday said orders to US factories for big-ticket manufactured goods plunged in October by the largest amount in two years. The 6.2% drop was more than double the 3% decline economists expected.
The department also said Americans cut their spending in October by the largest amount since the 2001 terrorist attacks. Consumer spending plunged by 1% last month, worse than the 0.9% decline that had been expected.
The fall in consumer spending has shown up in rising oil and gasoline inventories. For the week ended 21 November, crude stocks jumped by 7.3 million barrels, the Energy Department’s Energy Information Administration said in a weekly report Wednesday. Analysts had expected a boost of only 400,000 barrels.
Gasoline inventories rose by 1.9 million barrels. Analysts expected stockpiles to rise by only 300,000 barrels.
Prices have fluctuated between about $50 and $54 a barrel this week as investors grapple with the impact the global economic slowdown will have on crude demand.
Expectations of a production cut by the Organization of Petroleum Exporting Countries has helped support prices. Opec, which accounts for 40% of global supply, will hold an informal meeting Saturday in Cairo and an official meeting 17 December in Algeria.
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First Published: Thu, Nov 27 2008. 10 20 AM IST
More Topics: Oil | Crude | Financial crisis | US | Opec |