RTRS: Oil hits one-year low on fears of demand slump
By Annika Breidthardt
SINGAPORE (Reuters) - Oil prices fell five percent to a fresh one-year low just above $82 a barrel on Friday, as fears that market turmoil will send demand for fuel slumping outweighed news that OPEC will hold an emergency meeting in November.
With the financial crisis now almost a month old, Japan's Nikkei stock index .N225 plunged nearly 11 percent on Friday, while the yen and gold rose on growing concerns that no government effort so far has kept the global economy from a path to recession.
Investors, who earlier this year piled into oil and other commodities as a hedge against inflation and the weak dollar, are putting cash into safer havens and have sent oil plummeting by more than $60 from its record high above $147 in July.
U.S. light crude for November delivery fell $4.34, or 5.01 percent, to $82.25 a barrel by 0322 GMT, just above its earlier low of $82.07 and extending oil's more than $20 drop during the past two weeks alone.
Oil is now up 1.3 percent from a year ago, threatening to turn negative year-on-year for the first time since late August 2007.
London Brent crude shed $3.62 to $79.04 a barrel, the first time it has been below $80 in a year.
"The decline in oil prices was despite OPEC indicating that it will hold an extraordinary meeting on 18 November," said David Moore, a commodity strategist at Commonwealth Bank of Australia.
The Organization of the Petroleum Exporting Countries said it would hold the emergency meeting in Vienna to discuss the impact of the financial crisis on the oil market.
The statement came after calls from OPEC ministers this week for action to halt a slide in oil prices.
"OPEC appears to be scrambling to put in another, firmer floor at $80," said Jonathan Kornafel, Asia director of U.S. based options trader Hudson Capital Energy.
"The market may still overshoot on the downside regardless of what OPEC does, as financial flows continue to pour out of commodities," he added.
Investors will also look to Washington, where finance ministers and central bankers from the Group of Seven major industrial nations will meet amid expectations that the group will present a united front on policy to contain the crisis.
The International Energy Agency (IEA) releases its monthly report on the oil market at 0900 GMT, and investors are expecting another cut in demand expectations for this year and next.
The slumping economy has already prompted analysts to revise downwards their global oil demand growth target, with the U.S. Energy Information Administration this week dropping its 2009 projection by 140,000 barrels per day.
(Additional reporting by James Topham in Tokyo; Editing by Michael Urquhart)
