Oil’s decline deepened to below $54 a barrel on Wednesday, pressured by economic weakness that will further erode the world’s demand for fuel. U.S. crude fell to $53.30 a barrel, its lowest since January 2007, and by 8:11 a.m. EST was trading 61 cents lower at $53.78. Oil has dropped by nearly two-thirds from a record above $147 a barrel in July.
London’s Brent crude was off 54 cents at $51.30. The oil market was also closely watching U.S. weekly oil data due out at 10:35 a.m. EST on Wednesday as well as any moves from the Organization of the Petroleum Exporting Countries (OPEC) at their meeting next week. Analysts in a Reuters poll expected the U.S. oil data would show an increase of 800,000 barrels of crude stocks, and a 400,000 barrel rise in gasoline inventories. Distillate stocks, which include heating oil and diesel, were forecast to have risen 600,000 barrels.
The American Automobile Association (AAA) motor group said on Tuesday that U.S. travel for the upcoming Thanksgiving holiday next week would decline for the first time since 2002. OPEC is very concerned about the worsening world economic slowdown, the group’s president Chakib Khelil said in remarks published in El Khabar newspaper on Wednesday. Nigerian Oil Minister Odein Ajumogobia said his country was not pushing for further cuts in oil output.