Crude oil slumped as much as 5 percent in New York after OPEC left its output unchanged on concerns a fourth cut since September risked increasing energy costs amid the worst global recession in six decades. The Organization of Petroleum Exporting Countries yesterday deferred another reduction for at least 11 weeks while member states complete cuts agreed in December. OPEC members still need to trim about 800,000 barrels a day to comply with the record output reductions decided in December after oil slumped more than $100 a barrel from July’s record. “If OPEC cut their production, we could have gone over $50 and that could have caused the global economy to worsen,” said Ken Hasegawa, a commodity derivative sales manager for Newedge in Tokyo. “OPEC made a good decision. Although we are down $2, the market is very calm. It’s not panicked or crazy.” Crude oil for April delivery fell as much as $2.40, or 5.2 percent, to $43.85 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $44.58 at 10:37 a.m. Singapore time. The contract dropped 1.7 percent to $46.25 on March 13 after OPEC and the International Energy Agency each lowered their demand forecasts for 2009, citing the global recession. “OPEC has reestablished its credibility with the current cuts, so I think it would have done more harm to announce more cuts and not meet them,” said Jonathan Kornafel, a director for Asia at options traders Hudson Capital Energy. “As we got closer to the meeting sentiment on the cut shifted.” OPEC Targets At the start of March, 31 of 41 analysts surveyed by Bloomberg News were expecting OPEC to cut output by as much as 1.5 million barrels. That consensus diminished last week as some OPEC ministers urged greater compliance from fellow producers before setting further reductions. OPEC pumps 40 percent of the world’s oil and has reduced daily output targets by 4.2 million barrels since September to prevent a glut and slow the decline in prices. The 11 member- states subject to quotas are still producing about 800,000 barrels a day more than the group agreed in December. “We need to adhere and then in May we can look if other measures can be taken,” OPEC President Jose Maria Botelho de Vasconcelos said yesterday. Brent crude oil for April settlement declined as much as $1.66, or 3.7 percent, to $43.27 a barrel on London’s ICE Futures Europe exchange. It was at $43.46 a barrel at 10:22 a.m. Singapore time. The contract, which expires today, dropped 16 cents, or 0.4 percent, to $44.93 on March 13. The more actively traded May contract fell as much as 4.1 percent to $44 a barrel after falling 0.7 percent on March 13. Hedge-Fund Bets The collapse in oil prices has cut costs for consumers and business, one of the few bright spots in a bleak economic picture. Finance chiefs from the 20 biggest developed and emerging economies pledged a “sustained effort” to end the recession after a weekend meeting. The International Monetary Fund predicts the first global economic contraction in six decades. Hedge-fund managers and other large speculators last week increased their bets on falling oil prices for a second week, according to U.S. Commodity Futures Trading Commission data. Speculative net-short positions, the difference between contracts to buy and sell the commodity, jumped 11-fold to 6,015 contracts on March 10, the commission said March 13. ‘Poor Economic Picture’ “The net-short position is a reflection of the demand outlook,” said Hudson Capital’s Kornafel. “The previously announced cuts will eventually drain excess supply from the market but right now everyone is looking at the demand from the poor global economic picture.” New York futures have fallen 70 percent from their $147.27 record on July 11 as slowing world growth forced the International Energy Agency to revise its demand outlook for seven straight months. Oil reached a four-year low of $32.40 on Dec. 19. Finance ministers from the 20 largest economies yesterday pledged a “sustained effort” to cleanse banks of bad assets and free up global lending. A report today in the U.S., the world’s largest oil consumer, will probably show industrial production fell 1.3 percent in February, the sixth decline in seven months, according to a Bloomberg News survey of economists. Macro-economic reports aren’t likely to provide support for oil any time soon and yesterday’s OPEC decision will probably leave prices to “range-trade” between $40 and $50, said Toby Hassall, research analyst at Commodity Warrants Australia Pty in Sydney. “If we can get full compliance on the previous output cuts, that will continue to take some of the excess supply out of the market,” he said. “Inventories in the U.S. have started to level-off somewhat.” U.S. crude oil inventories in the U.S. stalled at about 351 million barrels the past five weeks, after climbing 9 percent in January.

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