Crude oil slumped as much as 5.7 percent in New York after OPEC refrained from cutting output on concern higher energy prices would worsen the global recession. The Organization of Petroleum Exporting Countries yesterday deferred another reduction for at least 11 weeks while member states complete cuts agreed to last year. OPEC members need to trim about 800,000 barrels a day to comply with the lower quotas decided in December after oil slumped more than $100 a barrel from July’s record. “OPEC’s decision has cut off any potential for prices to establish themselves above $50 a barrel,” said Bayram Dincer, a Dresdner Bank commodity analyst in Zurich. “In the short term we expect prices to trade in a range of $40 to $48 a barrel with risk skewed to the downside.” Crude Oil for April delivery fell as much as $2.63, or 5.7 percent, to $43.62 a barrel in electronic trading on the New York Mercantile Exchange. It was at $44.71 at 12:41 p.m. London 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. 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 agreeing to lower the production quota a fourth time. ‘Unfair Levels’ “The last thing OPEC wants to do is give bullish speculators a reason to start buying this market to bid prices up to unfair levels,” said Stephen Schork, president of Schork Group Inc. of Villanova, Pennsylvania. That could “ultimately retard the recovery globally and therefore keep demand depressed for longer that it needs at this point.” 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 $2.34, or 5.2 percent, to $42.59 a barrel on London’s ICE Futures Europe exchange. It was at $43.44 a barrel at 12:41 p.m. London 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 traded at $44.13, down 3.8 percent at 12:22 p.m. in London. OPEC Quota Saudi Arabia is willing to keep oil output below its OPEC quota level of about 8 million barrels a day unless consumers want more, the Saudi oil minister said today. Oil prices of $40 a barrel are too low and a range of between $60 and $75 is needed to allow production of higher-cost oil resources, according to Ali al-Naimi, minister for the world’s largest oil-exporting nation. 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. Chevron Corp. said 11,500 barrels a day of its Nigerian oil production was shut after a pipeline attack last week. The Makaraba-Otunana pipeline, which Chevron operates on behalf of a joint venture with Nigerian National Petroleum Corp., was breached on March 13, Chevron said in an e-mailed statement today. Production from the Makaraba platform was stopped as a result.

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