Crude oil futures down more than $1.00, to their lowest level in 11 weeks, or the lowest level this year. Analyst fear that OPEC would leave to much oil in the market and the US economy would not move up this year. Nymex April future ended down $1.14 at $26.45 .
IEA Data showing U.S. oil inventories rose last week and plunging equity markets plus the dot expected figures and the Dow Jones Industrial Average down 400 points-- influence the market down.
The decline comes two days before OPEC is expected to decide to cut production for the second time this year.
Expectations are the oil producers cartel will trim supplies by 500,000 to 1.0 million barrels per day, although the latest indications are leaning toward a smaller cut, brokers said, to Bridge News.
"This is a very serious matter, we are going to do our best to arrest the decline, but we have to take the whole economic situation into consideration," Naimi told reporters in Vienna on Wednesday, according to news agencies.
As previously reported Algerian oil minister and OPEC President Chekib Khelil said earlier the maximum cut would be 1.5 million bpd, while Venezuela's representative, Oil Minister and Venezuela’s Alvaro Silva, said the cut would be at least 500,000 bpd and may be more than
1.0 million bpd.
The International Energy Agency on Wednesday lowered its forecast for oil demand in 2001 by 200,000 bpd to 76.8 million bpd, though consumption is still expected to rise 1.41 million bpd from the previous year. The IEA, which monitors energy markets for the West, also underlined that inventories remain exceptionally low.
Also the crude got hammered by late fund selling, "Despite the Venezuelan and Iraqi reports, the funds seemed to
think that the output cut was not going to happen...they were dumping the May contract heavily," a trader said to Platts.
© 2001 Mena Report (www.menareport.com)