Reuters Oil Drops Another 6.5 Percent, Below $43 Thursday December 2, 11:38 am ET By Andrew Mitchell LONDON (Reuters) - Oil prices crumbled to a 12-week low below $43 a barrel on Thursday, suffering the biggest 2-day slide since the Gulf War after a rise in U.S. heating oil stocks triggered furious selling from big-money speculative funds. ADVERTISEMENT U.S. crude oil futures (CLc1) fell $2.99 a barrel, or 6.5 percent to $42.50, the lowest level since September. London Brent (LCOc1) was down $2.71 at $39.60, the first fall below $40 a barrel in three months. U.S. prices plunged $3.64 on Wednesday. The combined two session fall is the fourth biggest in the New York Mercantile Exchange's history and the steepest since the 1990/1991 Gulf War, according to Reuters figures. Lean U.S. stocks of heating fuel are rising as U.S. refineries ramp up runs after maintenance and unusually mild early-winter weather in the U.S. Northeast limits demand. A U.S. government agency report on Wednesday showed distillate stocks, including heating oil and diesel, rose 2.3 million barrels in the week to Nov 26 to 117.9 million barrels. A 1 million barrel build in heating oil stocks alone narrowed their supply deficit versus 2003 to 14 percent. A smaller than expected fall in natural gas stocks reported by the U.S. government on Thursday accelerated the losses. "The rout was essentially a massive fund bailout across the energy sector," said brokers Refco in a report. "Distillates remain below the average range for this time of year, but demand for heating fuel at the moment is low and is likely to remain so over the next couple of weeks given moderate forecasts for the eastern and Midwestern U.S." Prices are now more than $13 below their October all-time high, although still 30 percent up from the start of the year. OPEC PUMPS ON Crude stocks are building too as OPEC oil producers pump at the highest level in 25 years and signals from the cartel that they will keep pumping at current levels are also weighing on prices. OPEC's outgoing president and secretary general said on Thursday that the group will allow members to continue pumping above official quotas in the first quarter of next year if oil prices stay high. "I think we will tolerate overproduction because the price is still high," said Purnomo Yusgiantoro, also Indonesia's oil minister. "We will allow OPEC members to produce more." OPEC is due to meet in Cairo on Dec 10 to decide on output policy for the first quarter. OPEC's 10 members excluding Iraq pumped an estimated 27.9 million barrels per day in October, 900,000 bpd over a ceiling that came into effect Nov 1. OPEC's second-biggest producer Iran has said the group should trim quota-busting output to avoid a winter stockbuild. The group has projected a big winter inventory build if it keeps pumping at current rates. Cartel earnings have also been hit by the weaker dollar, which has fallen to a succession of life lows versus the euro, and big discounts for its mainly heavy, sour exports. The group's basket price recently has been about $10 a barrel below U.S. futures. Nigeria's top oil official reiterated he did not believe OPEC oil producers needed to rein in overproduction. "The prices are still up there," said Edmund Daukoru, Nigeria's Presidential Adviser on Petroleum Affairs on the sidelines of a conference in Rome. "To cut production would be giving the wrong signal. We are committed to economic growth and to cut production will give the opposite signal," he added ------------------------ Yahoo! Groups Sponsor --------------------~--> Make a clean sweep of pop-up ads. Yahoo! Companion Toolbar. Now with Pop-Up Blocker. Get it for free! http://us.click.yahoo.com/L5YrjA/eSIIAA/yQLSAA/BefplB/TM --------------------------------------------------------------------~-> ---------------------------------------------------------- IMQ - THE REAL TIME DATA AND BUSINESS NEWS SERVICE ---------------------------------------------------------- Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/obrolan-bandar/ <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
