0912.423.976

Quỳnh 0912.423.976
Thanks for Bloomberg to this news
Oil Falls to 17-Month Low on OPEC Skepticism, Warm U.S. Weather
By Mark Shenk
Nov. 17 (Bloomberg) -- Crude oil fell to a 17-month low in New York as warm weather in the northern U.S. reduced fuel demand and on signs OPEC won't cut production as much as pledged.
The Organization of Petroleum Exporting Countries agreed to reduce output by 1.2 million barrels a day starting Nov. 1. Prices plunged yesterday after consultant Oil Movements said November OPEC shipments will rise. The U.S. Climate Prediction Center said yesterday the El Nino weather pattern will cause a mild winter in the northern third of the U.S.
``A lot of what's happening is technical, we broke through $57 and that created a lot of selling,'' said Adam Sieminski, chief energy economist at Deutsche Bank Securities AG in New York. ``There's a huge amount of skepticism about the level of OPEC output. There seems to be a game right now between OPEC and the trading community.''
Crude oil for December delivery fell 45 cents, or 0.8 percent, to $55.81 a barrel on the New York Mercantile Exchange, the lowest close since June 15, 2005. Oil touched $54.86, the lowest intraday price since June 14, 2005. Prices fell 6.3 percent this week, the biggest one-week decline since October 2005. Futures are down 0.9 percent from a year ago.
The December contract expires today. The more-active January contract rose 40 cents, or 0.7 percent, to close at $58.97 a barrel.
``There's always volatility when the contract expires,'' Sieminski said. ``You either have to sell it or take delivery. A lot of people obviously don't need deliveries next month.''
OPEC Production Cuts
OPEC, which produces about 40 percent of the world's oil, will discuss production at its next meeting, which is scheduled for Dec. 14 in Abuja, Nigeria.
The OPEC crude oil basket price rose 14 cents to $55.47 a barrel yesterday, the group said in an e-mail. The price is a weighted average of 11 crude oil grades.
``Now that the basket is approaching $50 OPEC is likely to get serious about making cuts,'' said Antonio Szabo, chief executive officer of Houston-based consultant Stone Bond Technologies. ``OPEC's behavior only becomes good when they are under pressure.''
OPEC shipments will rise 0.9 percent in the month to Dec. 2 to 24.8 million barrels a day, compared with 24.6 million barrels a day in the four weeks ended Nov. 4, Oil Movements said yesterday.
``Some credit for the fall in prices has to be attributed to the tanker movement report, which raised fresh skepticism about OPEC's cuts,'' said Eoin O'Callaghan, an analyst with BNP Paribas SA in London. ``It's more important to look at the wider context. There is a slower global economy and that's reducing liquidity in the markets.''
Economic Growth
Housing starts in the U.S. tumbled in October to the lowest level in more than six years, raising the prospect that the economy will be further weakened after growing last quarter at the slowest pace since 2003.
Home construction shaved 1.12 percentage points off of third-quarter gross domestic product. The economy expanded at a 1.6 percent annual rate last quarter, the slowest in more than three years. The U.S. consumes 25 percent of the world's oil.
Home-heating demand in the Northeast, the region responsible for 80 percent of U.S. heating-oil use, will be 10 percent below normal through Nov. 24, said Weather Derivatives, a forecaster in Belton, Missouri.
``The decline is driven in large part by forecasts for mild weather,'' said Antoine Halff, a vice president and head of energy research at Fimat USA Inc. in New York. ``High distillate stocks in the U.S. are largely a legacy of the mild winter last year. I think this move lower will be short-lived because there have been a series of incredibly strong draws.''
Fuel Inventories
Supplies of distillate fuel, including heating oil and diesel, fell 11 percent to 135 million barrels the past six weeks, according to an Energy Department report on Nov. 15. The declines left inventories last week 6.3 percent higher than the five-year average for this time of year, the department said.
``I'm expecting to see a reversal in commodities, which could send oil back up to $70 by the end of the year,'' said Stephen Leeb of Leeb Capital Management, which overseas $150 million in New York. ``We've had near-record draws in products the last few weeks. There's very little spare capacity and I think OPEC will make most of the promised cuts.''
Brent crude oil for January settlement rose 45 cents, or 0.8 percent, to $58.99 a barrel on the London-based ICE Futures exchange