Crude oil traded near $37 a barrel in New York on speculation a deepening recession in Europe and Asia will stifle demand for fuels. The U.K. may face an economic contraction in the first quarter equal to last quarter’s 1.5 percent decline, the Bank of England said yesterday. Industrial energy consumption in Germany, Europe’s largest economy, grew less than expected last year. Japan, the world’s third-largest oil user, yesterday said its economy shrank the most since 1974 in the fourth quarter. “The oil price is reacting to the doom-and-gloom,” said John Hall, managing director of U.K.-based consultant John Hall Associates Ltd. “The U.K., U.S., Asia and the Eurozone are all contracting at a faster rate than oil is being produced, and the world is in a strong place in terms of oil stocks.” Crude oil for March delivery traded at $37.23 a barrel, down 0.8 percent from its close on Feb. 13, in electronic trading on the New York Mercantile Exchange at 10:24 a.m. in London. Floor trading was closed for the Presidents’ Day holiday in the U.S. and yesterday’s transactions will be booked today for settlement. The March Nymex oil contract expires on Feb. 20. The more actively traded April contract was at $41.15 today, down 82 cents from last week’s close. Stimulus Package President Barack Obama today signs into law a $787 billion stimulus package of spending and tax cuts designed to revive the moribund economy. The U.S., the world’s largest oil consumer, has lost 3.6 million jobs since the recession started more than a year ago. “The market data from the U.S. and the other major economies is not painting a picture of an imminent recovery,” said Toby Hassall, research analyst at Commodity Warrants Australia Pty in Sydney. “The Japanese data was pretty bad.” The price of oil for delivery in April is $4 a barrel higher than for March, the so-called prompt month contract, after reaching as much as $8.19 a barrel on Feb. 12. This structure, in which the future month’s price is higher than the one before it, is known as contango, allowing buyers to profit from hoarding oil. “By now it should be clear to everyone out there that spot Nymex crude is untradeable,” Stephen Schork, president of the Schork Group Inc., said in a report today. “What we have witnessed over the last month in the Nymex March-April market is not reasonable and it is not reflective of underlying fundamentals.” The build in supplies at Cushing, Oklahoma, where West Texas Intermediate, the U.S. benchmark grade, is stored, has contributed to the contango. Inventories there climbed 1.7 percent to 34.9 million barrels last week, the Energy Department said on Feb. 11. It was the highest since at least April 2004, when the department began keeping records for the location. Brent crude for April settlement rose as much as 72 cents, or 1.7 percent, to $44 a barrel on London’s ICE Futures Europe exchange. It was at $43.88 a barrel at 10:25 a.m. London time.

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