Oil May Fall as Slowing Economy Curbs Fuel Demand, Survey Shows

By Mark Shenk

Oct. 3 (Bloomberg) -- Crude oil may fall next week on concern that lower economic growth will curb fuel demand in the U.S., the world's biggest energy consuming country.

Seventeen of 31 analysts surveyed by Bloomberg News, or 55 percent, said prices will decrease through Oct. 10, the most bearish response since the week ended June 6. Seven respondents, or 23 percent, said oil will rise and seven said prices will be little changed. Last week 48 percent expected futures to decline.

The U.S. may fall into a recession, the International Monetary Fund said yesterday in its most pessimistic outlook for the world's largest economy since the credit crisis began last year. The nation's fuel demand averaged 19 million barrels a day during the past four weeks, the lowest since October 2001, the Energy Department said in an Oct. 1 report.

``There are three reasons oil prices are going lower,'' said Adam Sieminski, Deutsche Bank's chief energy economist, in Washington. ``The economy, the economy and the economy.''

Crude oil for November delivery fell $12.92, or 12 percent, to $93.97 a barrel so far this week on the New York Mercantile Exchange. Futures have fallen 36 percent since touching $147.27 a barrel on July 11, the highest since trading began in 1983.

The oil survey has correctly predicted the direction of futures 49 percent of the time since its start in April 2004.

Bloomberg's survey of oil analysts and traders, conducted
each Thursday, asks for an assessment of whether crude oil
futures are likely to rise, fall or remain neutral in the coming
week. The results were:

RISE NEUTRAL FALL
7 7 17

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.