Crude Oil Slides Below $90 A Barrel Ahead Of Next Week’s OPEC Meeting

November 30th, 2007
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U.S. crude oil futures ended lower for the fourth day in five on Friday, falling below $90 for the first time in five weeks as traders speculated that OPEC’s meeting next week would decide on an output increase.

Worries that the weakening U.S. economy would curb oil demand also fueled pre-weekend selling, analysts said.

On the New York Mercantile Exchange, January crude settled down $2.30, or 2.5%, at $88.71 a barrel, the lowest settlement since Oct. 24’s $87.10.

It traded from $88.52 to $91.52. The day’s low was the lowest since the $87.54 low on Oct. 25.

“Expectations of a production increase by OPEC at their meeting next week and technical selling helped drive the market below $90,” said Addison Armstrong, an analyst at TFS Energy in Stamford, Conn.

From the $99.11 high a week ago, prices at the day’s low had slumped $10.59, or 10.7%. Nymex crude hit an intraday record of $99.29 on Nov. 21.

“We’re in a downtrend because the market is very concerned about the economy and where it goes from here,” said Eric Wittenauer, an analyst at A.G. Edwards in St. Louis. “That obviously has implications for demand growth.”

In London, January Brent crude fell $1.96, or 2.2%, to $88.26 a barrel, trading from $87.55 to $90.78.

The Organization of Petroleum Exporting Countries meets on Dec. 5 in Abu Dhabi, where oil ministers will map production policy following a Nov. 1 boost of 500,000 barrels per day.

A Reuters poll of 24 banks, traders and consultants had 18 participants forecasting another output rise.

But Saudi Oil Minister Ali al-Naimi said Friday that world oil markets are well supplied and that it “remains to be seen” whether OPEC will boost output.

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