Crude Oil Slumps On News Of Output Boost From OPEC

Oil prices fell last night when an OPEC official said the cartel may boost output, calming concerns about tight supplies. Data released by oil tanker-tracker Petrologistics shows OPEC oil exports have already risen by about 400,000 barrels a day, analysts said.

As the oil supply picture is improving, concerns about weakening demand are rising. Analysts said Friday's government report that consumer inflation jumped in November by the largest amount in more than two years continues to weigh on markets.

Light sweet crude for January delivery fell 64 cents to settle at $90.63 a barrel on the New York Mercantile Exchange. MCX Crude Oil closed the sessiomn at Rs 3556 per barrel.

While oil prices rose slightly last week, they remain nearly $10 a barrel below November's record highs. Many analysts believe the market's sentiment has changed from bullish to negative amid a number of reports that demand and economic growth are weakening.

Oil prices fell today despite two weekend developments that, several weeks ago, would have sent prices sharply higher: Word that Turkish forces attacked Kurdish rebel positions inside Iraq and the call by a Nigerian militant group that rebels in the oil-rich African nation should unite and attack the continent's largest oil industry.

The dollar contributed to that weakness by stabilizing against other currencies in recent days. Oil prices have risen this fall partly due to speculative buying by investors who see crude futures as a hedge against the dollar, which has weakened this year. Also, oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is falling.

Other energy futures mostly fell today. Gasoline futures for January delivery fell 0.63 cent to settle at $2.3354 a gallon on the Nymex while January heating oil fell a cent to settle at $2.5979 a gallon. January natural gas rose a cent to settle at $7.035 per 1,000 cubic feet. In London, Brent crude fell 40 cents to settle at $91.29 a barrel on the ICE Futures exchange.