NEW YORK - Crude oil fell more than $1 a barrel, capping a 23 percent drop since Nov. 26, after the United States forecast annual demand will decline for the first time since 1983.
Global consumption will average 85.75 million barrels a day in 2008, down 50,000 barrels from 2007, the Energy Department said in its monthly Short-Term Energy Outlook yesterday. As fuel use drops, OPEC is discussing making a second output cut in less than two months at a Dec. 17 meeting.
"The wider economy is the main driver of the oil market right now," said Rick Mueller, director of oil markets at Energy Security Analysis Inc. in Wakefield, Mass.
Crude oil futures for January delivery fell $1.64 to $42.07 a barrel on the New York Mercantile Exchange.
Global consumption last fell in each of the four years ended in 1983, according to the department.
Demand will decline an additional 450,000 barrels a day next year to 85.3 million barrels a day, the department said.
The decline in crude oil has sent both gasoline futures and pump prices lower this year. Gasoline for January delivery fell 2.54 cents to 93.64 cents a gallon in New York. Futures touched 89.5 cents a gallon on Dec. 5, the lowest since the contract was introduced in October 2005.
A government report today is forecast to show that US crude oil inventories rose 1.3 million barrels last week, according to the median of 14 responses in a Bloomberg News survey. The report will probably show that US supplies of gasoline and distillate fuel, which includes diesel and heating oil, dropped.
