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Posted by on October 9, 2008, 3:41 pm
http://news.yahoo.com/s/nm/20081009/bs_nm/us_markets_oil
Oil falls 2 percent on demand concerns
12 minutes ago
NEW YORK (Reuters) - Oil prices fell nearly 2 percent on Thursday as
expectations that the financial crisis could further slow demand
outweighed calls by some OPEC members to cut output to prop up prices.
The producer group announced it will hold an emergency meeting on
November 18 in Vienna to discuss the impact of the financial crisis on
oil markets, which has helped knock prices from a record peak over
$147 a barrel in July. U.S. crude traded $1.68 lower at $87.27 a
barrel by 12:57 p.m. EDT, after hitting a fresh 10-month low on
Wednesday. London Brent crude fell $1.24 to $83.12 a barrel.
"We're sill worried about the demand side of the market. The (U.S.
Energy Information Administration) data from yesterday was bearish and
we might be seeing a second effort to price that in," said Tim Evans,
an analyst for Citi Futures Perspective.
U.S. gasoline and crude stocks rose sharply last week as demand in the
world's biggest consumer continued to slow due to the economic crisis
and high fuel costs, the EIA reported on Wednesday.
The Dow Jones and the S&P 500 stock indexes fell on Thursday as
persistent fears that the widening credit crisis will tip the global
economy into recession derailed an attempted rebound. Analysts said
that, despite Wednesday's coordinated rate cut by global central banks
and other moves to calm investors, there remained abundant signs
credit markets were gridlocked.
Further pressure on energy prices has come as investors, who earlier
this year piled into oil and other commodities as a hedge against
inflation and the weak dollar, have sought to put cash into safer
havens.
The slumping economy has prompted analysts to revise downward their
global demand growth targets for next year, with the EIA this week
dropping its 2009 projection by 140,000 barrels per day.
In addition, No. 2 consumer China -- one of the engines behind the six-
year rally in oil prices -- is expected to halt auto fuel imports for
the second month in a row in October, according to a Reuters poll.
OPEC members Nigeria, Qatar, Libya and Iraq this week floated the idea
of a cut in the group's oil output amid the slowing demand outlook.
"The Organization is concerned about the deteriorating economic
conditions with contagion risks," the Organization of Petroleum
Exporting Countries said in a statement announcing the emergency
meeting next month.
"The continuing turmoil in the financial markets has spread to many
regions and created even more uncertainties for the world economy."
(Reporting by Matthew Robinson, Gene Ramos, and Robert Gibbons in New
York; Jane Merriman in London; Annika Breidthardt in Singapore;
Editing by Walter Bagley)
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