Oil prices end flat after a tumble
Oil prices ended flat Friday, with OPEC officials sending mixed messages about a production cut before a meeting in December.
Meanwhile, gasoline prices continued their free fall and are now at levels not seen since Jan. 21, 2005 -- good news for travelers heading home after Thanksgiving getaways.
Pump prices fell a penny overnight to a national average of $1.835 a gallon for self-serve regular, according to the American Automobile Assn., the Oil Price Information Service and Wright Express.
The average national price has fallen 75 cents in the last month alone and is down 41% from the $3.09 retailers were getting on average a year ago.
In California, the average was $2.008, down from $3.034 a month earlier and $3.412 a year earlier.
After tumbling earlier in the day during an abbreviated session on the New York Mercantile Exchange, light sweet crude for January delivery settled down a penny at $54.43 a barrel. Oil prices fluctuated between $50 and $55 this week, pausing after a fall of more than 60% since reaching a record $147.27 in mid-July.
Grim economic data this week pointing to a severe recession in the U.S. in the fourth quarter and signs of slowing growth around the world kept prices from rebounding further.
“The drop-off in demand is going to continue,” said Jonathan Kornafel, Asia director at market maker Hudson Capital Energy in Singapore. “There’s no reason for the market to rally.”
Oil will likely trade below $50 a barrel and could test the $40 level by the end of the year, Kornafel said.
Investors will be watching whether the Organization of the Petroleum Exporting Countries reduces output quotas at an informal meeting today in Cairo.
OPEC oil ministers Friday downplayed expectations of, but didn’t dismiss outright, an immediate output cut.
“I don’t expect a cut out of the Cairo meeting, but I do expect a 1.5-million-barrel cut” at their regularly scheduled December meeting, Kornafel said.
Energy analyst Catherine Hunter at IHS Global Insight in London said chances for the implementation before January of further output cuts by OPEC were slim, because of advance sales allocations by several members.
