Crude Oil Falls on Speculation Slowing Growth Will Cut Demand

By Gavin Evans

Nov. 3 (Bloomberg) -- Crude oil fell in New York on signs slowing global economic growth is reducing demand for fuel.

Oil imports by South Korea, Asia's fourth-largest economy, fell 1.4 percent last month as growth slowed and the nation's falling currency increased fuel costs, the government said today. A report today will probably show manufacturing in the U.S., the world's largest oil consumer, fell to a seven-year low last month, according to a Bloomberg News survey of economists.

Crude oil for December delivery dropped as much as $1.13, or 1.7 percent, to $66.68 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $66.90 at 7:30 a.m. in Singapore.

The contract rose $1.85, or 2.8 percent, to $67.81 a barrel on Oct. 31, taking its gain for the week to 5.7 percent. Prices jumped late in the session as traders who had bet on falling gasoline and heating oil prices were forced to buy futures to limit losses before the contracts expired.

Oil's gain last week was the first in five weeks. Prices jumped 7.6 percent on Oct. 29 as shares surged and the dollar fell after the Federal Reserve cut interest rates to a 50-year low.

New York futures have tumbled 54 percent from the record $147.27 a barrel reached July 11, on signs the economic slowdown in the U.S. and Europe will spread to emerging markets, curbing fuel demand.

Brent crude oil for December settlement fell $1.02, or 1.6 percent, to $64.30 a barrel on London's ICE Futures Europe exchange today. The contract rose 2.5 on Oct. 31 and gained 5.3 percent for the week.

Production in Russia, the world's second-largest exporter, dropped for a 10th month in October as output from older fields declined faster than new wells were added, the nation's Energy Ministry said yesterday.

Iranian sales to Total SA, Europe's third-largest oil company, will fall by 70,000 barrels a day in line with cuts agreed by the Organization of Petroleum Exporting Countries last month, Oil Minister Ghalamhossein Nozari said yesterday.

To contact the reporter on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net