Tuesday, November 11, 2008
Nov. 11 (Bloomberg) — Crude oil fell below $59 a barrel in New York for the first time since March 2007, and gasoline tumbled, on speculation the International Energy Agency will cut its 2009 oil-demand forecast because of slowing economic growth.
The IEA, which coordinates energy policy in 28 developed countries, will reduce the estimated growth in global demand for a third month in a report tomorrow, according to four former IEA analysts. The euro-area economy will probably contract 0.7 percent next year, Morgan Stanley said in a report.
“It all comes back to the economy and how deep folks think the recession will be,” said Rick Mueller, director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “Demand is poor and should get worse as the recession deepens.”
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Crude oil for December delivery declined $3.40, or 5.5 percent, to $59.01 a barrel at 11:15 a.m. on the New York Mercantile Exchange. Futures touched $58.32, the lowest since March 20, 2007. Prices have tumbled 60 percent since reaching a record $147.27 on July 11.
Gasoline for December delivery declined 8.28 cents, or 6.1 percent, to $1.2851 a gallon in New York. Futures dropped to $1.2766 a gallon, the lowest since the contract began trading in October 2005.
Pump prices are following futures lower. Regular gasoline, averaged nationwide, declined 2 cents to $2.22 a gallon, AAA, the nation’s largest motorist organization, said today on its Web site. The fuel has tumbled 46 percent from the record $4.114 a gallon reached on July 17.