Oil May Fall as Economic Turmoil Cuts Fuel Demand, Survey Shows

By Mark Shenk

Nov. 14 (Bloomberg) -- Crude oil may fall next week on speculation that fuel consumption will extend declines as economic turmoil spreads.

Seventeen of 31 analysts surveyed by Bloomberg News, or 55 percent, said prices will decline through Nov. 21. Eleven respondents, or 35 percent, said oil will rise and three forecast markets will be little changed. Last week 46 percent expected futures to increase.

Oil in New York touched $54.67 yesterday, the lowest since Jan. 30, 2007, after the International Energy Agency slashed its 2009 oil-demand forecast by the most in 12 years because of deteriorating global economic growth. The U.S. Energy Department cut its demand and price forecasts on Nov. 12.

``The IEA reduction was huge,'' said Rick Mueller, director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. ``It's hard to find any bullish news out there.''

Crude oil for December delivery fell $2.80, or 4.6 percent, to $58.24 a barrel so far this week on the New York Mercantile Exchange. Futures have dropped 60 percent from the record $147.27 a barrel reached on July 11.

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
                    11          3        17

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