UPDATES

UPDATE FOR WEEK ENDING 14 NOVEMBER

Crude oil fell more than $1 a barrel, and gasoline tumbled,

as the global economic slowdown cut demand in the largest

energy-consuming countries.

China Petroleum & Chemical Corp., supplier of more than

half the fuel to the Asian nation, is slashing processing rates

by 10 percent from July’s record. U.S. retail sales in October

dropped the most on record and Europe fell into its first recession in 15 years, reports showed today.
“This is a headline-driven market and that’s giving the sellers

plenty of ammunition,” said Peter Beutel, president of energy

consultant Cameron Hanover Inc. in New Canaan, Connecticut.

“Everyone is looking for recessionary numbers. The retail

numbers were even worse than expected.”


Crude oil for December delivery declined $1.20, or 2.1 percent,

to settle at $57.04 a barrel at 2:42 p.m. on the New York

Mercantile Exchange. Futures touched $54.67 yesterday, the

lowest since Jan. 30, 2007. Prices, which have tumbled 61

percent since reaching a record $147.27 on July 11, declined

6.6 percent this week.


Gasoline for December delivery fell 6.33 cents, or 4.9 percent,

to $1.2391 a gallon in New York, the lowest settlement price

since the contract was introduced in October 2005.

China Petroleum, or Sinopec, will process about 15 million metric

tons a month, or 3.65 million barrels a day, starting in

November, said three refinery officials, who declined to be

named because of internal rules. China is the world’s

second-biggest oil-consuming country.


Falling Sales

Retail sales in the U.S. dropped 2.8 percent in October, the

fourth consecutive drop and the biggest since records began

in 1992, the Commerce Department said today in Washington.

Purchases excluding automobiles also posted their worst

performance. The U.S. consumes 24 percent of the world’s oil.

The Organization of Petroleum Exporting Countries, supplier

of 40 percent of the world’s oil, is “very likely” to recommend

a production cut at the end of this month, Iran’s OPEC

governor, Mohammad Ali Khatibi, told the country’s state-run

Mehr news agency. Iran is OPEC’s second-biggest oil producer.

OPEC will hold a meeting on Nov. 29 in Cairo, according to a

spokesman at the group’s Vienna headquarters. It will coincide

with a gathering of Arab oil ministers scheduled for that day.

‘Significant Lag’

“OPEC may well announce additional production cuts, but

there will be a significant lag effect, with any cuts coming well

into next year,” said Paul Crovo, a Philadelphia-based oil analyst

with PNC Capital Advisors. Compliance from members may

not be in line with announced reductions, producing a

“muted impact,” he said.

The group decided at a meeting in Vienna last month to lower

the production target for 11 of the group’s members by 1.5

million barrels a day, from 28.8 million barrels a day.


Brent crude oil for January settlement fell $2, or 3.6

percent, to settle at $54.24 a barrel on London’s ICE

Futures Europe exchange.