Crude Oil Prices Decline on U.S. Recession Concerns (Bloomberg) (21-01-2008)

Jan. 21 (Bloomberg) -- Crude oil declined to a one-month low as global stock markets plunged on recession concerns in the U.S.

Oil prices are now down more than 11 percent from its $100.09 a barrel record on Jan. 3, and are leading declines across commodities markets as gold and copper are also falling as slower growth may cut demand for energy and metals.

Crude oil for February delivery declined as much as $1.90, or 2.1 percent, to $88.67 a barrel in electronic trading on the New York Mercantile Exchange. That's the lowest since Dec. 12. It was at $89.92 at 11:46 a.m. London time. The contract expires tomorrow.

The more active March contract fell $1.55, or 1.7 percent, to $88.37 a barrel at 11:47 a.m. London time. There will be no settlement prices today as the exchange's floor trading session is closed for the Martin Luther King Day holiday.

Brent crude for March settlement fell as much as $1.68, or 1.9 percent, to $87.55 a barrel on the ICE Futures Europe exchange. The contract traded at $87.95 in London at 11:47 a.m. local time.

OPEC minister Mohammed al-Hamli said the consortium hasn't yet made a decision on whether to raise output at its Feb. 1 meeting, the United Arab Emirates oil minister told reporters in Abu Dhabi today.

Prices advanced earlier after Qatar's Oil Minister Abdullah bin Hamad al-Attiyah said yesterday there is no need for the Organization of Petroleum Exporting Countries to raise output when it meets Feb. 1.

Mexico, the third-largest supplier of crude to the U.S. in 2006, stopped shipments yesterday morning after strong winds and heavy rains shut terminals.

The storm closed oil terminals and seven commercial shipping ports on the Gulf of Mexico, including three facilities of state-run Petroleos Mexicanos, and the Salina Cruz site on the Pacific, according to the Mexican Merchant Marine's Web site.

Hedge-fund managers and other large speculators decreased their net-long position in New York crude-oil futures in the week ended Jan. 15, according to U.S. Commodity Futures Trading Commission data.

Source: Bloomberg