Crude oil falls to $56

NEW YORK: Oil fell for a second day in New York on signs the global slowdown is limiting demand in China and Japan, the world's second- and third-largest crude users.Japan entered the first recession since 2001 as its gross domestic product fell an annualized 0.1 percent in the three months ended Sept. 30 after shrinking 3.7 percent in the previous period. China National Petroleum Corp., the country's biggest oil producer, said demand has contracted ``sharply'' since September because of the global credit crisis.“The market is continuing to trade down in general,'' said Clarence Chu, a trader with options market-maker Hudson Capital Energy in Singapore. “China is a significant market for oil. If China slows down, that will put a big dent in demand.''Crude oil for December delivery dropped as much as $1.44, or 2.5 percent, to $55.60 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $55.75 at 11:07 a.m. in Singapore.The contract slumped 2.1 percent to settle at $57.04 on Nov. 14, having touched $54.67 the previous day, the lowest since Jan. 30, 2007. Prices declined 6.6 percent last week as world equity markets dropped, Germany entered its worst recession in 12 years and U.S. retail sales fell for a fourth straight month.“There doesn't seem to be much out there to stop the fall in prices,'' said Toby Hassall, research analyst at Commodity Warrants Pty in Sydney. “Weak demand and a pretty bleak demand outlook'' may push oil prices as low as $50 this week, he said.Economists had predicted Japan's economy would rebound 0.1 percent in the September quarter. Japan used 5.1 million barrels a day in 2007, according to the BP Statistical Review of Energy. China used 7.9 million barrels a day.The slowdown in demand because of the credit crisis caused stockpiles in the country to increase ``significantly,'' China National Petroleum said in a statement on its Web site.“As the impact of the financial crisis on China's economy deepens, the company's operations have also been affected adversely,'' the statement said.The International Energy Agency last week slashed its global oil consumption forecast for 2009 by 670,000 barrels a day. Demand will rise 0.4 percent to 86.5 million barrels a day, with growth in emerging nations partly offsetting a 1.6 percent contraction in fuel use in developed economies, the Paris-based agency said.Brent crude oil for January settlement fell as much as 99 cents, or 1.8 percent, to $53.25 a barrel on London's ICE Futures Europe exchange. It was at $53.35 a barrel at 11:07 a.m. Singapore time. The contract fell 3.6 percent to $54.24 a barrel on Nov. 14.

News Source:http://thearynews.com/