Oil Tumbles Below $95 on Prospect of Supply Boost
Oil fell more than 2 percent on expectations OPEC will boost supply and concerns US economic problems will grind down demand growth.
U.S. light, sweet crude for January delivery was down. London Brent crude also fell.
Saudi Arabia's Oil Minister Ali al-Naimi said the kingdom had already increased production beyond targets set under an OPEC deal to boost output from Nov. 1.
But Naimi refused to say whether Saudi Arabia, the world's biggest oil exporter, would support another output increase when the cartel meets Dec. 5 in Abu Dhabi.
Indonesia's oil minister said he would back a hike of 500,000 barrels per day (bpd).
"Expectations of a possible increase in (OPEC) output pulled crude prices sharply lower today," said Andy Lebow of MF Global. "In addition, concerns about the economy are beginning to come into play here. With consumer confidence down, the question arises on where the (energy) consumption numbers are going to be."
Consumer confidence fell for a fourth straight month in November to a two-year low on concerns about rising gasoline prices and financial market volatility.
Prices have surged over 40 percent since mid-August in a rally to over $99 a barrel on the slumping U.S. dollar, supply concerns ahead of the Northern Hemisphere winter and rising investor interest.
But worries of an economic slowdown in the US crimping oil demand in the top consumer have weighed on crude's record rally, as have prospects OPEC could agree to ramp up output at next week's meeting.
"I will support OPEC on a new production increase," Indonesian Energy Minister Purnomo Yusgiantoro said Tuesday.
But Saudi Arabia's Naimi declined to comment on what action OPEC would take.
"We will look at all information available, and decide accordingly, on whatever the information tells us about supply, demand, inventories," Naimi said in Singapore, adding Saudi Arabia had already raised production to 9 million bpd, slightly more than its target Nov. 1.
Some OPEC ministers have said supplies are sufficient to meet demand, but consumers worry dwindling stockpiles might not be sufficient to keep up with winter demand.
Government inventory to be released Wednesday is expected to show U.S. distillates inventories, which include heating oil, down 1.4 million barrels, according to a Reuters survey of analysts.
Crude stocks are expected to fall by 800,000 barrels while gasoline was forecast to rise by 1.0 million barrels, a preliminary Reuters survey found.