Oil fell below $78 a barrel on Tuesday, extending its recent losing
streak, as producer group OPEC said supply was ample enough to meet winter
demand and trimmed estimated demand for its oil.
U.S.
crude fell 72 cents to $77.28 a barrel by
8:48 a.m. EST.
The New York Mercantile Exchange will combine prices for Monday and Tuesday
into a single trading session because of the Martin Luther King Day holiday.
Brent dropped by $1.16 to $75.94 a
barrel.
The Organization of Petroleum Exporting
Countries, the source of more than a third of world's oil, said in its monthly
report that demand for its oil would average 28.59 million barrels per day
(bpd) in 2010, 20,000 bpd less than expected last month.
"Inventories remain high enough to
cope with any sudden jump in winter demand," the report also said. It is
written by economists based at OPEC's Vienna headquarters.
"OPEC is still concerned about
demand," said Andy Sommer, energy market analyst with EGL in Switzerland,
adding the group had the lowest demand recovery estimate in three key
organizations including itself, the International Energy Agency and the U.S.
Department of Energy.
Sommer also said the bankruptcy
protection filing by Japan Airlines Corp (
9205.T
) had some impact on oil prices.
"We see this as a pure fundamental
to show how weak jet fuel demand is," he said.
CHINA
The market focus will shift to Chinese
economic data, including inflation, producer prices and retails sales, due out
on Thursday. ECON.CN
"A key determinant of oil prices is
demand from China and the fourth quarter economic data due out on Thursday will
be an important factor," Christopher Bellew of brokerage Bache Financial
said.
China's industrial output probably
jumped by 20 percent in the year to December from November's figure of 19.2
percent, a Reuters survey showed. That would be the fastest pace since February
2006.
Higher industrial output can push up oil
demand from the country.
China
's crude oil imports will probably
rise 15 percent this year from 2009 as the country launches the second phase of
its state petroleum reserve, according to China Oil, Gas & Petrochemicals,
a report published by the state-run Xinhua news agency.
(from Reuters)