By Christian Schmollinger Nov. 25 (Bloomberg) -- Crude oil fell in New York, paring yesterday's 9 percent gain, on concerns the rally is unsustainable as fuel demand declines. Oil climbed more than $4 a barrel yesterday, following European and U.S. equities higher, after the government guaranteed $306 billion in Citigroup assets. Motorists in the U.S., the world's largest energy consumer, drove 4.4 percent fewer miles in September even as gasoline prices dropped, the Federal Highway Administration said on Nov. 19. ``In the near term, the real economic situation has not improved,'' said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. ``Most of the economic data in the coming months is going to be weak. That means the consumption issue is going to be top of mind for the oil markets, and that will put the price under pressure.'' Crude oil for January delivery fell as much as 94 cents, or 1.7 percent, to $53.56 a barrel on the New York Mercantile Exchange. It was at $53.64 a barrel at 1:23 p.m. Singapore time. Futures have dropped 63 percent since reaching a record $147.27 a barrel on July 11. Yesterday, the contract increased $4.57, or 9.2 percent, to settle at $54.50 a barrel, the biggest one- day gain since Nov. 4. Other commodities fell today on concerns that yesterday's gains were overdone. Copper for three-month delivery dropped as much as 2.9 percent to $3,640 a metric ton on the London Metal Exchange on rising inventories amid the global recession. Gold for immediate delivery was down 63 cents to $813.70 an ounce after rising 7.3 percent yesterday. Brent crude oil for January settlement fell as much as $1.01, or 1.9 percent, to $52.92 a barrel at 1:21 p.m. Singapore time on London's ICE Futures Europe exchange. The contract yesterday increased $4.74, or 9.6 percent, to settle at $53.93 a barrel. OPEC to Meet Oil ministers from the 13-nation Organization of Petroleum Exporting Countries are scheduled to meet on Nov. 29 in Cairo. Slowing global demand growth has left a 1 million barrel-a-day oversupply that needs to be removed by the year-end, Venezuela's oil minister, Rafael Ramirez, said on Nov. 23. ``We are worried about the direction of prices,'' Shokri Ghanem, Libya's top oil official, said in an interview from Tripoli. ``We need to see if the oil price is falling because liquidity is leaving the market or if there is too much oil in the market.'' OPEC's decision to trim output by 1.5 million barrels a day at a meeting in Vienna last month failed to stem the decline in crude prices as the global economic slump slashed demand. The group supplies more than 40 percent of the world's oil. Chavez Speaks ``Either very late this year or early next, we might see the oil price improve, because we've yet to see the full impact of the OPEC's changes to their production targets and possible changes that could come at the December meeting,'' said Commonwealth Bank's Moore. ``In that context, oil might find a firmer underpinning.'' The group is due to hold another summit on Dec. 17 in Algeria. Venezuela wants OPEC to return to a system of oil price bands in order to guarantee stability, President Hugo Chavez said last night. The country would consider a price of $80 to $100 a barrel to be ``fair,'' Chavez said in a televised press conference. That price is in line with Dutch bank ABN Amro's outlook for next year. It sees oil trading between $80 to $110 a barrel in 2009, said Jens Zimmerman, a senior equity analyst, in an interview with Bloomberg Television. ``For oil to be below $50 a barrel is also unrealistic because now many of the projects that should come through are being canceled,'' he said. ``So from now to 2011 you will get the same supply crunch, once the economy starts to pick up again, that we saw between 2005 and 2007.'' Heating Oil Falls U.S. supplies of distillate fuel, a category that includes heating oil and diesel, fell for a second week because of cold weather along the East Coast, a Bloomberg News survey of analysts showed. Distillate stockpiles dropped 1 million barrels last week from 126.9 million barrels the week before, according to the median of nine analyst estimates before an Energy Department report this week. Gasoline inventories probably increased 500,000 barrels from 198.6 million barrels the week before, according to the survey. Refineries probably operated at 85.2 percent of capacity, up 0.3 percentage point from the week before, the survey showed. Crude-oil supplies may have risen 1.1 million barrels from 313.5 million barrels the week before. The Energy Department is scheduled to release its weekly report on Nov. 26 at 10:35 a.m. in Washington. To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net.

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