Crude oil fell to the lowest in almost four weeks after OPEC said demand will drop this year and U.S. supplies rose as the recession cut fuel use, bloomberg reported.
Consumption of OPEC supplies will shrink 4.2 percent to 29.5 million barrels a day, according to a monthly report released today. The discount of oil in New York to the Brent grade in London widened to as much as $10.79 a barrel today, a record, because of rising supplies at Cushing, Oklahoma, the delivery point for barrels traded on the U.S. exchange.
"The overriding factor impacting the market is the fact that we are in the midst of a global recession, which is buffeting the U.S., even China," said Rachel Ziemba, an analyst at RGE Monitor, an economic research company in New York. "That's going to be a negative for oil demand."
Crude oil for February delivery fell $1.83, or 5 percent, to $35.40 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures touched $33.20, the lowest since Dec. 19. Prices are down 62 percent from a year ago.
Brent crude oil for February settlement declined 55 cents, or 1.2 percent, to $44.53 a barrel on London's ICE Futures Europe exchange. The more-active March Brent contract rose 1 cent to $47.63 a barrel.
