Oil Falls Below $53 Again On Dropping Demand Ahead Of OPEC Meeting

November 27, 2008 1:48 p.m. EST

New York, NY (AHN) - Crude rates dropped again below $54-a-barrel mark on Thursday, after surging by more than 7 percent yesterday, on weak economic data and dropping global demand.

The world's largest economy is reported a rise in inventories over the last few weeks as the drivers in the U.S. are cautiously using gasoline amid large increase in the unemployment rate and weak consumer spending.

The U.S. Energy Department said in a reported that the crude-oil supplies or inventroeis have increased by 7.28 million barrels to 320.8 million barrels for the ninth consecutive time last week.

While, the stockpiles for gasoline moved up by 1.84 million barrels, or 0.9 percent, to 200.5 million barrels, which was also more than anticipated growth by the market analysts.

The market analysts on Wall Street have been speculating that the 13-member Organization of Petroleum Exporting Countries (OPEC) may decide to cut oil out in their scheduled meeting on November 29 in Cairo and on December 17 in Oran.

The much anticipated cut in supplies would be a move by the members of OPEC to level the prices of crude to range between $70 per barrel and $100 per barrel.

Last month, OPEC had decided to cut around 5 percent or 1.5 million barrels per day of production from November 1.

Oil was trading below $53-a-barrel mark as a light sweet crude-futures barrel for January delivery moved down by $1.82, or 3.3 percent, to $52.62 a barrel in the New York Mercantile Exchange's electronic trading on Thursday.

On Wednesday, the contract jumped by as much as $3.67, or 7.2 percent, to close at $54.44 a barrel in overnight trading on the New York Mercantile Exchange, after China't the People's Bank of China slashed its key lending and deposit rates by as much as 1.08 percent.

Brent North Sea crude for January delivery also declined $1.94, or 3.6 percent, to $51.98 a barrel in London's ICE futures exchange, which is the lowest level in 22 months.

Iran's OPEC governor Mohammad Ali Khatibi has been pushing the international cartel to cut supplies by another 1.0 to 1.5 million barrels per day to boost crude prices.