Crude oil falls below $53

Crude oil fell below $53 a barrel in New York for the first time since June 2005 after U.S. fuel demand plunged to its lowest in more than two years. Consumption, based on deliveries from refineries, dropped 4% as mild weather in the Northeast sapped heating oil use. Mild weather in the Northeast of the U.S., the world's biggest oil consumer, saw the nation's distillate demand drop to a five-month low last week. Snow in New York City yesterday, the first this winter, was the latest since records began in 1869.

Crude oil for February delivery fell to $52.94 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $53.19 at 12:43 p.m. in Singapore. The contract fell to $54.02 yesterday, the lowest close since June 10, 2005, and the fifth decline in six days. Oil prices have fallen 16% in the past year and are down 32% from the record $78.40 reached on July 14 after Israeli forces invaded Lebanon.

Hedge fund managers and other large speculators last week slashed their bets on rising oil prices by 89%. Crude oil prices may find support around $52.40 a barrel according to technical charts that traders use to make decisions on when to buy and sell, said Mitsubishi's Nunan. Slowing demand growth and unseasonably warm weather prompted the Organization of Petroleum Exporting Countries to agree to two production cuts totally 1.7 million barrels a day to stem the slide in prices and prevent a glut.

(2007-01-11 13:47:31 SGT) [Energy] Permalink

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