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Oil prices drop on concern that OPEC cut will not suffice

20 February 2009 07:55 (UTC +04:00)

Bakuâ€“ APA-Economics. Crude oil fell, paring its largest gain in seven weeks, on concern that OPEC output cuts may not erode supply enough amid weak global demand for fuels.
Oil jumped 14 percent yesterday after a U.S. Energy Department report showed inventories dropped 138,000 barrels to 350.6 million barrels last week, the first decline this year. Crude imports to the U.S. fell 8.9 percent. The International Energy Agency, OPEC and the Department have all cut their forecasts for 2009 oil demand because of the global recession.
Crude oil for March delivery fell as much as 90 cents, or 2.3 percent, to $38.58 a barrel in electronic trading on the New York Mercantile Exchange at 1:12 p.m. Singapore time. The contract rose $4.86 to settle at $39.48 a barrel yesterday. Prices are down 13 percent this year.

The March contract expires tomorrow. The more-active April contract was at $39.18 a barrel, down $1, after rising 7.4 percent to $40.18 a barrel yesterday.

Brent crude oil for April settlement fell as much as 62 cents, or 1.5 percent, to $41.37 a barrel on Londonâ€™s ICE Futures Europe exchange at 1:08 p.m. in Singapore. It gained 6.2 percent to $41.99 a barrel yesterday.
Analysts had forecast a build in U.S. crude inventories of 3.2 million barrels, according to a Bloomberg News survey. Stockpiles had gained in 18 out of the 20 previous weeks.