NEW YORK: Oil fell over 5 percent yesterday as further indicators of falling global demand linked to a potential recession offset OPEC plans to reign in output.
US crude fell $3.65 to $64.16 a barrel by 12.57 EST (1757 GMT). London Brent crude dropped $4.18 to $61.14.
US factory activity - a barometer for future oil demand - contracted sharply in October, falling to its lowest in 26 years as the financial crisis racked the world’s largest economy.
“Oil markets remain gloomy, pressured by fears of strong demand destruction as a result of the global financial crisis,” noted Vienna’s JBC Energy, in its daily newsletter.
In Abu Dhabi, oil executives and political leaders told a major petroleum conference that the era of cheap energy is over, and warned of another price spike if investment in oil production is curtailed.
“Prices are falling, but they’re falling for the wrong reasons: Because of reduced demand and a consequence of reduced economic activity, not because we have increased supply or increased energy efficiency,” BP PLC Chief Executive Tony Hayward said at the Abu Dhabi International Petroleum Exhibition and Conference.
Meanwhile, US stocks have started November with a cautious advance.
In midday trading, the Dow Jones industrial average rose 54.08, or 0.58 percent, to 9,379.09 after rising 86 and falling 41.
The Standard & Poor’s 500 index rose 3.11, or 0.32 percent, to 971.86, while the Nasdaq composite index rose 17.15, or 1.00 percent, to 1,738.10.
The FTSE 100 index of leading British shares closed 65.94 points, or 1.5 percent, higher at 4,443.28, while France’s CAC-40 was up 40.90 points, or 1.2 percent, at 3,527.97.