Nov. 23 -- Crude oil traded near $97 a barrel, after failing to reach $100 this week, because increased shipments and slowing demand in the U.S. may bolster stockpiles.
OPEC's daily shipment of crude will rise 2.9 percent in the four weeks to Dec. 8 from the previous month, Oil Movements, a Halifax, England-based consultant, said yesterday. The number of economists forecasting a U.S. recession almost doubled in the past two months, according to a survey by the National Association for Business Economics this week.
Oil ``has got a bit of a headwind coming,'' said Rowan Menzies, head of research at Commodity Warrants Australia in Sydney. ``It will be lower in a month's time.''
Crude oil for January delivery was at $97.40 a barrel, up 11 cents, from the Nov. 21 close, in after-hours electronic trading on the New York Mercantile Exchange at 1:46 p.m. in Singapore.
Floor trading in New York was closed for yesterday's holiday and electronic trades will be included in today's session for settlement purposes. Oil traded as low as $96.37 yesterday. Prices have gained 60 percent this year.
Futures declined from a record $99.29 on Nov. 21 after the Conference Board's index of leading economic indicators fell a bigger-than-forecast 0.5 percent in October and share prices dropped on concern mortgage defaults will lead to bigger losses.
Economic Outlook
The day before, Federal Reserve minutes showed officials cut 2008 growth expectations to 1.8 percent, the forecast mid- point, from the 2.5 percent to 2.75 percent picked in June. The new rate would be the lowest since the 2001 recession.
Brent crude oil for January settlement was at $94.98 a barrel, up 48 cents, on the London-based ICE Futures Europe exchange at 1:42 p.m. Singapore time. The contract reached a record $96.53 on Nov. 21.
The Organization of Petroleum Exporting Countries will load 24.5 million barrels a day, compared with 23.8 million barrels in the month ended Nov. 10, Oil Movements said. It will be OPEC's 14th consecutive increase and the biggest this year, according to the company.
Oil climbed to records this month as the sliding dollar and falling equity prices prompted a ``scramble'' by investors for physical assets including gold and silver, Commodity Warrant's Menzies said. The euro reached $1.4874 yesterday.
``There's still enough momentum out there to finally make the push for $100,'' Simon Wardell, energy research manager with Global Insight Inc. in London, said yesterday. ``If the dollar slide continues, getting to three figures before the year is out is all but inevitable.''
Downward Risks
New York prices set records twice the past three weeks without breaching $100. That failure may be a sign investors are nearing their limits, said Menzies, who is advising clients to short the commodity.
``If the dollar starts to stabilize that will put a bit of downward pressure on oil,'' he said. Expectations of another OPEC production increase at the group's Dec. 5 meeting may also prompt some selling.
``I don't see how the Saudis cannot increase output if prices are still up around $100,'' he said. Saudi Arabia, OPEC's biggest producer initiated the group's 500,000 barrel-a-day production increase from Nov. 1.
Prices also rose the past month after stockpiles in the U.S., the world's biggest user, fell four of the past five weeks. Supplies unexpectedly declined last week as imports fell from a three-month high and fuel deliveries jumped ahead of the holiday weekend. A record 38.7 million Americans were forecast by AAA to travel more than 50 miles during the break.
While global supplies are tight, U.S. inventories aren't especially low and the outlook is for demand growth to slow, Menzies said.
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