Oil Prices Drop
NEW YORK --- Crude-oil futures dropped more than $2 a barrel today, amid lingering concerns about demand, the Wall Street Journal reported.
At one point today, light, sweet crude for December delivery was down $2.61 at $65.20 a barrel on the New York Mercantile Exchange. Brent crude on the ICE Futures exchange fell $4.06 to $61.26 a barrel.
One factor has been a slowdown in China's economic growth, according to analysts at Credit Suisse. Credit Suisse now sees world oil demand falling by 300,000 barrels a day next year -- the sharpest decline since the early 1980s.
"The oil market news is understandably dominated by repeated, rapid downward lurches in the demand curve, and these may continue for a while yet," the bank's analysts said in a note.
In general, Nymex crude has traded between $60 and $70 a barrel over the past week.
"The market is still trying to make up its mind about taking another leg down," Dean Hazelcorn, a trader at Coquest Inc. in Dallas, told the Wall Street Journal. "I think it's at least a 50-50 chance."
A week ago, the price of crude touched $61.30 a barrel, the lowest since May 2007.
The Organization of Petroleum Exporting Countries last month agreed to trim output by 1.5 million barrels a day, starting Nov. 1.
The cartel's president, Chakib Khelil, on Sunday said the move "will take a long time to take hold" and shore up prices because demand for oil remains below OPEC's revised production level, Agence France-Presse reported.
The United Arab Emirates, Nigeria and Iran have all announced plans to cut supply. But crude oil traders are still waiting for Saudi Arabia's response to OPEC's decision.
In its note, Credit Suisse said, "OPEC is now in damage limitation mode and all talk of defending certain price levels is fanciful."