Oil May Fall After OPEC Meet as Recession Deepens, Survey Shows

By Grant Smith

Nov. 28 (Bloomberg) -- Crude oil may fall next week on speculation that any decision taken by OPEC at its meeting this weekend will fail to offset the impact of the global recession.

Fourteen of 38 analysts surveyed by Bloomberg News, or 36 percent, said prices will decline through Dec. 5. Twelve respondents, or 32 percent, said oil will rise and 12 forecast oil will be little changed. Last week, 59 percent expected futures to decline.

“We doubt OPEC can materially alter either market fundamentals or sentiment near-term,” Merrill Lynch & Co. oil analyst Alastair Syme said in a Nov. 26 report. “In a rapidly falling demand environment we see little that suppliers can do to either reverse sentiment or tighten market fundamentals.”

The Organization of Petroleum Exporting Countries will have all options open when it meets in Cairo tomorrow, according to Shokri Ghanem, Libya’s top oil official. U.S. crude inventories swelled for a ninth time in a row last week, according to the Energy Department, while other government data showed the biggest slump in consumer spending in seven years.

The crude oil contract for January delivery has gained 8.8 percent to $54 a barrel so far this week on the New York Mercantile Exchange. Futures have dropped 63 percent from the record $147.27 a barrel reached on July 11.

     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
                    12          12       14

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net