Crude oil fell to the lowest in a week on speculation that OPEC will maintain production targets and resist more cutbacks even as the recession curbs demand. OPEC should “stay the course” on output policy, Saudi Oil Minister Ali al-Naimi repeated today in Vienna, where the group meets this week. A Persian Gulf oil official familiar with the matter said yesterday that OPEC won’t change its quotas. German exports and company spending fell in the first quarter, dragging Europe’s largest economy into its deepest slump on record. “The fundamental situation is very weak; demand in the U.S. is just collapsing,” Eliane Tanner, an analyst at Credit Suisse Group AG, said in a TV interview from Zurich. “The market is already pricing in a no-change scenario” from OPEC. Crude oil for July delivery fell as much as $2.14, or 3.5 percent, to $59.53 a barrel on the New York Mercantile Exchange, and was at $60.70 at 1:30 p.m. in London. The exchange will combine yesterday and today’s trading for settlement purposes because U.S. floor trading was shut yesterday for Memorial Day. OPEC, responsible for 40 percent of global crude supply, is likely to keep output quotas unchanged for a second time this year as recovering oil prices forestall the need for new cuts, according to a Bloomberg survey published on May 22. “Sixty dollars is not a hurdle for OPEC, most of the members can balance their budgets at that level and so there’s no reason for them to cut,” said Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt. “Prices need to correct to $50 a barrel or below.” Oil Bulls Still, some analysts forecast oil prices may resume their rally. Oil in New York may rise to $77 a barrel in coming months as futures contracts “correct” the decline from a record $147.27 in July, according to technical analysis from MF Global. Oil may first climb to $71.75 a barrel, the level reached on Nov. 4, P.A. Rajan, a Singapore-based technical analyst at MF Global, said in a telephone interview yesterday. Crude could reach $77, near the so-called Fibonacci retracement of 38.2 percent of oil’s decline from the July record. Brent crude for July settlement fell as much as $1.80, or 3 percent, to $58.41 a barrel and was at $59.78 a barrel at 1:30 p.m. on London’s ICE Futures Europe exchange. The dollar rose against the euro for the first time in seven days after Britain’s Telegraph newspaper cited a German banking regulator as saying debt at the nation’s biggest lenders may increase. A stronger dollar limits investors’ need for assets to hedge against inflation such as commodities. The dollar strengthened to $1.3909 per euro as of 1:06 p.m. in London, from $1.4017 yesterday in New York. Crude oil inventories held by the 28 nations advised by the International Energy Agency rose to 62 days of demand in the first quarter, according to the agency’s report on May 13. That is up from 54 days in the year-earlier period and from 58 days in the fourth quarter of 2008.

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