Oil Slides Below $92 on US Economy Concerns
Oil fell more than $2 a barrel to belwo $92 on Tuesday after data showed a decline in U.S. retail sales, adding to concern that the world's top fuel consumer is heading into a recession.
Sales at U.S. retailers fell0.4 percent in December, according to a government report that implied costlier energy and slumping housing prices were taking a toll on consumers.
"All signs point to a recession, which could be a precursor to demand destruction," said Nauman Barakat, oil trader and senior vice president at Macquarie Futures USA.
U.S.light, sweet crude for February fell. London Brent crude traded lower.
Concern of a U.S. economic slowdown has prevented oil from repeating its all-time high of $100.09 hit on Jan. 3.
Former U.S. Federal Reserve Chairman Alan Greenspan said the U.S. was probably in recession or nearing it.
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Oil also eased as Saudi Arabia's oil minister, Ali al-Naimi, said the world's top exporter would raise output when the market needed more crude, responding to a U.S. call for more supply.
U.S. President George W. Bush, who is on tour of the Middle East, earlier on Tuesday said an increase in output by the Organization of the Petroleum Exporting Countries would help ease the pain of high energy prices.
"OPEC should understand that if they can put more supply on the market it will be helpful," Bush told reporters.
Saudi Arabia is the de facto leader of OPEC. The producer group, which pumps more than a third of the world's oil and meets on Feb. 1, has said repeatedly it is supplying enough to meet demand.
The U.S. president joins other leaders who this week have addressed the topic of record oil prices.
French President Nicolas Sarkozy told Saudi Arabia's King Abdullah that the kingdom should use its influence to moderate prices, which the French president said should realistically be around $70.
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And Venezuelan President Hugo Chavez said on Monday he hopes oil will not go beyond $100. The OPEC member is normally a price hawk and typically resists OPEC agreements to increase output.
Supply disruptions in countries such as Nigeria and political tension in the Middle East limited the decline, while the slumping U.S. dollar supported oil and other commodities such as gold.
Royal Dutch Shell declared force majeure on crude oil shipments from its Forcados export terminal in Nigeria following sabotage to two pipelines last week.
The latest snapshot of U.S. crude oil inventories, due out on Wednesday, will help set direction for the market.
Stockpiles were expected by analysts to rise by 1.2 million barrels in the week to Friday. An increase would be the first in nine weeks.