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Oil prices underreacts OPEC decision

17 March 2009 10:45 (UTC +04:00)

Baku. Vahab Rzayev â€“ APA-Economics. Oil fell in New York, retreating from yesterdayâ€™s two-month high, on speculation U.S. stockpiles rose last week because of lower demand in the worldâ€™s largest crude consumer, Bloomberg reports.

Crude-oil inventories climbed 1 million barrels in the week ended March 13 from 351.3 million barrels, according to estimates in a Bloomberg survey before an Energy Department report tomorrow. Asian stocks gained for a third day, led by financial and commodity companies, on optimism bank earnings will recover.
Crude oil for April delivery fell as much as 71 cents, or 1.5 percent, to $46.64 a barrel in electronic trading on the New York Mercantile Exchange. It was at $46.87 a barrel at 4:20 p.m. Singapore time.
Yesterday, April futures rose $1.10 to $47.35 a barrel, the highest settlement since Jan. 6. Prices have gained 5.1 percent this year.
Crude oil in New York has tumbled from a record $147.27 a barrel in July because of the economic contraction in major consuming countries. Futures have rebounded from $32.40 on Dec. 19, the lowest since February 2004.
Crude futures plunged in early trading yesterday after the Organization of Petroleum Exporting Countries deferred another production cut for at least 11 weeks at its weekend meeting.
OPEC has reduced daily output targets by 4.2 million barrels since September to prevent a glut and slow the decline in prices. The group is scheduled to meet again on May 28.
Brent crude oil for May settlement fell as much as $1.20, or 2.6 percent, to $45.26 a barrel, and was trading at $45.61 on Londonâ€™s ICE Futures Europe exchange at 4:21 p.m. in Singapore. Yesterday, the contract rose 58 cents, or 1.3 percent, to settle at $46.46 a barrel.