Oil May Fall as Economic Slowdown Cuts Fuel Use, Survey Shows
By Mark Shenk
Oct. 10 (Bloomberg) -- Crude oil may fall next week on concern that fuel consumption will drop as the credit crisis slows global economic growth.
Thirteen of 30 analysts surveyed by Bloomberg News, or 43 percent, said prices will decrease through Oct. 17. Nine respondents, or 30 percent, said oil will rise and eight said prices will be little changed. Last week 55 percent expected futures to decline.
``The economic outlook is the primary mover of the market at the moment,'' said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago.
The Dow Jones Industrial Average fell below 9,000 for the first time since 2003 yesterday as higher borrowing costs and slower consumer spending spurred concern that there will be new victims to the credit crisis. The U.S., which consumes 24 percent of the world's oil, is now in a recession, according to a Bloomberg News survey of economists.
Crude oil for November delivery fell $7.29, or 7.8 percent, to $86.59 a barrel so far this week on the New York Mercantile Exchange. Futures touched $84.19, the lowest intraday price since Oct. 15, 2007. Prices, which are up 7.9 percent from a year ago, have dropped 41 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:
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