Crude oil fell from a two-week high on speculation recession in the world’s largest economies will curtail demand for fuel and energy. A report today in the U.S., the world’s largest oil user, will probably show an index of leading economic indicators dropped to the lowest in almost five years last month, according to a Bloomberg News survey of economists. Oil exports from Iraq, not restricted by the OPEC quota, rose 6.4 percent last month, the Associated Press reported yesterday, citing government data. “There’s no sign out there that oil demand as well as the world’s economy will recover in a short period of time,” Ken Hasegawa, Tokyo-based commodity derivatives sales manager at Newedge Group, said by telephone today. “Oil will probably be stuck in a range of $40 and $50 a barrel for the time being.” Crude oil for March delivery fell as much as 87 cents, or 1.9 percent, to $45.60 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $45.72 at 1:49 p.m. Tokyo time in light trading because of the Lunar New Year holiday in most Asian countries except Japan. “Trading is quite slow today because of lack of Asian participants,” said Masahiko Sato, a senior analyst at OvalNext Corp. in Tokyo. “Oil prices may fluctuate when European participants start to come in.” The contract rose 6.4 percent to $46.47 on Jan. 23, the highest settlement since Jan. 6. It gained 9.2 percent last week as oil producers reduced output and plunging equity markets prompted investors to buy oil, gold and other commodities. Brent crude oil for March settlement fell as much as $1.02, or 2.1 percent, to $47.35 a barrel on London’s ICE Futures Europe exchange. It was trading at $47.64 at 11:41 p.m. in Tokyo. The contract gained 6.6 percent to $48.37 a barrel on Jan. 23. U.S. Economy New York oil futures have fallen 69 percent from the July record $147.27 a barrel as the world economy stalled prompting the Organization of Petroleum Exporting Countries and the International Energy Agency to predict demand declines this year. A report later this week will probably show the U.S. economy shrank 5.5 percent in the fourth-quarter, the fastest pace in 26 years. White House officials are working to get President Barack Obama’s $825 billion stimulus package approved by mid-February to create or save as many as 4 million jobs. Americans should expect “no good news on the immediate horizon,” Vice President Joe Biden said on CBS yesterday. “It’s challenging for Obama’s administration to pull out of this situation where thousands of plant and project investments are reviewed and delayed,” Newedge’s Hasegawa said. OPEC pumps about 40 percent of the world’s oil and agreed last month to cut output by 9 percent starting Jan. 1 to prevent a glut and stem falling prices. The 11 member-states covered by the agreement will reduce January output by about 5 percent, consultant PetroLogistics Ltd. said Jan. 23 based on tanker movements. Iraq, not restrained by a quota as it recovers from war, has increased output 8.3 percent in straight gains in the past three months, according to a Bloomberg survey of analysts and traders. Monthly output reached 56.2 million barrels in December, AP reported, citing Oil Ministry data.

Source