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Oil prices keep sinking

24 February 2009 09:31 (UTC +04:00)

Baku. Vahab Rzayev - APA-Economics. Crude oil fell on speculation demand will weaken faster than the Organization of Petroleum Exporting Countries is curbing production, Bloomberg reports.
OPEC, the U.S. Energy Department and the International Energy Agency cut their demand forecasts this month because of the recession. U.S. stocks fell for a sixth day yesterday, a sign that fuel consumption may drop further. The 11 OPEC members with quotas, all except Iraq, reduced output 3.8 percent to 25.3 million barrels a day in February, according to consultant PetroLogistics Ltd. of Geneva.
Crude oil for April delivery fell 31 cents, or 0.8 percent, to $38.13 a barrel at 11:11 a.m. Sydney time on the New York Mercantile Exchange.
In New York yesterday, oil for April delivery fell $1.59 to settle at $38.44 a barrel. Prices are down 14 percent this year.
Supply from OPEC will average 25.3 million barrels a day in February, down from 26.3 million barrels in January, Conrad Gerber, founder of PetroLogistics, said in an interview. Members have a quota of 24.845 million barrels a day.
Iran, Venezuela and Iraq said last week that OPEC is prepared to cut production again when it meets on March 15. The group agreed Dec. 17 on output constraints that would reduce supplies in January by 2.2 million barrels a day from December levels. That followed pledges to remove 2 million barrels a day in the fourth quarter of last year.
U.S. crude-oil stockpiles increased 1 million barrels last week, according to the median of nine analyst estimates before an Energy Department report this week. Analysts were split over whether gasoline supplies rose or declined. Stockpiles of distillate fuel, a category that includes heating oil and diesel, dropped 1.5 million barrels, according to the survey.
Brent crude oil for April settlement declined 90 cents, or 2.1 percent, to end the session at $40.99 a barrel on Londonâ€™s ICE Futures Europe exchange.