Oil Prices Fell Monday Ahead of OPEC Meeting
Oil prices fell Monday, reflecting the market's skepticism that OPEC's meeting later this week will produce effective production cuts.
Light sweet crude for November delivery on the New York Mercantile Exchange dropped 10 cents to $58.47 a barrel in electronic trading by midafternoon in Europe.
Since a mid-July high of $78.40 a barrel, the price of crude oil has dropped by more than 25 percent.
The last time OPEC reduced its output — also by 1 million barrels a day — was December 2004 when oil traded slightly above $40 a barrel.
The expected slowdown in the U.S. economy following monetary tightening and the weakening housing sector has added considerable uncertainty to the economic outlook and consequently oil demand.
The outlook for non-OPEC supply has changed dramatically. Supply has picked up in 2006 to 1.1 million barrels a day and is expected to grow next year at 1.8 million barrels a day, the highest rate since 1984, pointing to a clear imbalance between supply and demand.
However, markets also reacted to an early snowstorm that hit the northeastern United States late last week.
Light sweet crude for November delivery on the New York Mercantile Exchange dropped 10 cents to $58.47 a barrel in electronic trading by midafternoon in Europe.
Since a mid-July high of $78.40 a barrel, the price of crude oil has dropped by more than 25 percent.
The last time OPEC reduced its output — also by 1 million barrels a day — was December 2004 when oil traded slightly above $40 a barrel.
The expected slowdown in the U.S. economy following monetary tightening and the weakening housing sector has added considerable uncertainty to the economic outlook and consequently oil demand.
The outlook for non-OPEC supply has changed dramatically. Supply has picked up in 2006 to 1.1 million barrels a day and is expected to grow next year at 1.8 million barrels a day, the highest rate since 1984, pointing to a clear imbalance between supply and demand.
However, markets also reacted to an early snowstorm that hit the northeastern United States late last week.
posted by Ottawa Gas Prices | 12:01 PM
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