NEW YORK - Oil prices got battered again on Friday, bringing this week's slide to nearly 14 per cent as warm weather in the US Northeast and disappointing US jobs data darkened prospects for energy demand.
Losses were kept in check, however, after a senior Opec delegate raised the possibility
that the oil cartel might rein in output when it meets in Cairo next Friday if prices prices keep declining.
US crude oil futures were down 50 cents at US$42.75 per barrel, while London Brent fell 65 cents to US$39.50 a barrel. Earlier, both contracts had fallen by more than a dollar.
Losses have amounted to nearly US$7 or 14 per cent since Monday when US crude closed at US$49.76.
The price slump began Wednesday after a US government report showed distillate stocks, which include heating oil and diesel, rose by 2.3 million barrels last week, cutting into a year-on-year supply deficit.
Forecasts for continued mild temperatures in the US Northeast, which is the biggest heating oil market in the world, along with indications of slowing US economic growth sparked selling on Friday by dimming prospects for strong energy demand.
Temperatures in the Northeast, home to 78 per cent of US households that use heating oil, will increase to six to 12 degrees Fahrenheit above normal by Monday, private weather forecaster Meteorlogix predicted.
"We'll stay in a free-fall until we get a shift in the temperature patterns," said Jim Ritterbusch, president of Ritterbusch and Associates.
The US Labor Department said on Friday only 112,000 new US jobs were created in November, the weakest performance since July and well below Wall Street forecasts, signaling a potential slowdown in energy demand growth.
Opec WARY OF PRICE CRASH
Since October's record peak of US$55.67 prices have sunk by more than US$13 and US crude futures are back to levels last seen in September. Brent, the benchmark for European shipments, is hovering around prices hit in July.
"If you see the slide continuing we may have to take some action," the senior Opec delegate told Reuters.
"We will need to be sure that the price is falling because of fundamentals and we will need to be sure of forecasts that there is oversupply."
The alternative could be to eliminate leakage above existing quota limits, the delegate said.
Overall crude stocks are already well above last year's levels as Opec oil nations produce at the highest rate in 25 years.
But more bullish analysts say growth in the United States is still robust and any sudden cold weather could revive concerns about fuel stocks.
"There was some more profit-taking after the jobs data, but I still think the States is doing well economically, especially if you consider that we had US$50 oil last month," said Edward Meir of Man Energy.
Opec's meeting next week will set output policy for the first quarter of next year.
Some members want the output spree to continue, though the cartel's second biggest producer Iran has advocated a clampdown on output above official quotas to avoid a winter stock-build.
Opec's reference crude basket fell to US$35.42 a barrel on Thursday from US$38.03 the day before, Opec said on Friday.
The fall takes Opec's crude to just US$3.50 a barrel over the top of the US$28-US$32 target, identified by Opec's President Purnomo Yusgiantoro on Friday as an acceptable range for the cartel's crude.
- REUTERS
NEW YORK - Oil prices got battered again on Friday, bringing this week's slide to nearly 14 per cent as warm weather in the US Northeast and disappointing US jobs data darkened prospects for energy demand.
Losses were kept in check, however, after a senior Opec delegate raised the possibility
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