Oil hits year''s low at $57.24 a barrel
12 Oct 2006
Mumbai: Crude prices fell to their lowest level this year with US crude trading 26 cents lower at $57.33 a barrel, off a session low of $57.24 - the lowest level since December 19, 2005. London Brent crude was down 35 cents at $58.30.
The
fall came even as traders awaited details of OPEC's
proposed output cut and a further rise in US crude stocks.
OPEC, which currently supplies around 27.5 million barrels a day, has agreed to cut crude supplies by around one million barrels per day, but it is not yet decided on whether to base reduction from the notional 28 million-bpd production ceiling or from actual supply.
The members are also divided over whether to hold an emergency meeting to formalise what would be the OPEC's first output cut since 2004.
Market analysts expect prices to fall further with or without an output cut as distillate demand has been sapped by warm weather. US inventories are already brimming and are expected to continue to build, they point out.
However,
crude oil consumption in China and India are still robust
and the two are expected to raise imports as prices
fall. China's customs data showed its crude imports
in September jumped 24 per cent from a year earlier
to a record high of 13.46 million tonnes, or 3.28 million
bpd. China has also started building up emergency stockpiles.