Crude gives up 10% for the week

Price end at lowest level in a month as OPEC says it is ready to increase production

Crude-oil future prices for sweet light crude for January delivery which had ended at $98.18/bbl last week (23 November) finished $9.47 (9.6%) lower this week (30 November) at $88.71/bbl. This was the lowest price for crude in a month. For the month of November 2007, prices slipped by $5.82/barrel.

Price decreased during the week after OPEC hinted that the cartel is ready to increase production. Prices were also affected as traders speculated that demand from USA might go down in the coming months. Price did rise a bit during the end of the week on reports that there were explosion in four Canadian oil pipelines that supply oil to USA. But crude gave up all its gains on news that the pipes were re-opening after a short time.

Price also dropped to its lowest level in almost a month after Energy Department reported in the weekly inventory report that crude supplies fell less than expected for the week ended 23 November.

Traders speculated during the week that the 12 members of the OPEC will probably increase output 1.1% to 31.6 million barrels a day in December. Also, as per reports, Saudi Arabia, the biggest producer in the OPEC, is pumping 9 million barrels a day, the most in more than a year.

As per the weekly inventory report by the Energy Department on Wednesday, 28 November, U.S. crude inventories fell by 400,000 barrels to 313.2 million barrels in the week ending 23 November. This was much less than expected figure of 500,000 barrels. Though U.S. crude inventories fell for a second week, stocks are still in the upper half of the average range for this time of year.