Dec. 24 (Bloomberg) -- Crude oil fell below $37 a barrel in New York before a report forecast to show that U.S. inventories rose for a third week as demand ebbs. Crude stockpiles probably increased 500,000 barrels in the week ended Dec. 19 from 321.3 million the week before, the 12th gain in 13 weeks, according to a Bloomberg survey before today’s Energy Department report. Idemitsu Kosan Co., Japan’s second- biggest refiner, will cut crude processing next quarter because of weak demand in the third-largest oil-consuming nation. Last week, OPEC announced a record production cut to counter declining consumption. “There isn’t a lot of upside for oil prices, stocks are rising and refineries are not necessarily buying oil,” said Peter Luxton, an energy analyst at Informa Global Markets. Oil for February delivery lost as much as $2.35, or 6 percent, to $36.63 a barrel on the New York Mercantile Exchange and traded at $36.69 at 12:29 p.m. London time. Crude has fallen 34 percent this month. Both the Nymex and the ICE Futures Europe exchange in London, where Brent crude is traded, will be closed tomorrow. ICE will have an early close of 2 p.m. local time today, instead of the normal 11 p.m. Oil has fallen 60 percent this year, poised for the first annual decline in seven years, as stockpiles increased and OPEC failed to cut production quick enough to stem falling consumption. OPEC Production The Organization of Petroleum Exporting Countries, which supplies of 40 percent of the world’s oil, may meet before its next scheduled summit in March after cutting production quotas on Dec. 17, Venezuelan Energy Minister Rafael Ramirez said yesterday. OPEC Secretary-General Abdalla El Badri said prices will probably reach the group’s target of $75 a barrel in early 2010, Al Hayat reported. Officially, OPEC doesn’t have a formal price target, though many members, including Saudi Arabia, have said the industry needs a $75 price to ensure adequate investment in new fields. In another indication of the slowing U.S. economy, the median resale price of homes fell 13 percent, probably the largest drop since the Great Depression, National Association of Realtors Chief Economist Lawrence Yun said in Washington. Production has stopped at some oil and gas wells off the northwest coast of Australia because of a cyclone. Nexus Energy Ltd. and Woodside Petroleum Ltd. both said that rigs they operated are closed because of tropical storm Billy, with winds of up to 60 knots and sea swells of up to four meters. Brent Declines Brent crude oil for February settlement was at $37.76 a barrel, down $2.60, at 12:33 p.m. London time. Yesterday, the contract declined $1.09, or 2.6 percent, to $40.36 a barrel. Oil for delivery in February 2010 was more than $14 higher than the current month today, a market condition known as contango. The pattern encourages companies to store oil. “The contango means the inventories are increasing,” said Tetsu Emori, a commodity fund manager at Astmax Ltd. in Tokyo. “More-than-adequate levels of inventories will push prices down. It’s a very, very bearish sign.”

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