According to Bloomberg, crude oil fell more than $3 a barrel, the biggest decline in three months, after the International Energy Agency cut its forecast for global demand through 2008 as record prices curb fuel use.
The IEA said that consumption next year will average 87.69 million barrels a day, 300,000 barrels a day less than a previous estimate. Fourth-quarter use will be 500,000 barrels a day less than expected, the adviser to 26 oil-consuming nations said in a monthly report.
``The IEA report today had a sizable decline in demand expectations for this year,'' said James Ritterbusch, president of Ritterbusch & Associates, in Galena, Illinois. ``It looks like they were too optimistic about demand and didn't figure on the impact of high prices.''
Crude oil for December delivery fell $3.42, or 3.6 percent, to $91.20 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Prices are heading for the biggest drop since Aug. 6. Oil touched $90.13, the lowest since Oct. 31. Futures climbed to $98.62 on Nov. 7, the highest price since trading began in 1983. Oil is up 55 percent from a year ago.
A Lehman Brothers Holdings Inc. report on Nov. 9 said oil may test $100 today when options expire. An oil options contract gives a buyer the right to buy or sell a specific quantity of crude-oil by a specific date and at specified price.
``It looks like the market may have found a top,'' Ritterbusch said. ``It was widely anticipated that the crude- option expiration would facilitate a run on $100.''
_________________________________________________________
It was also reported today that the oil market is being driven by speculation. No kidding! Right now the market is still volatile and oil could still see $100.00 a barrel. The consumers will still see an increase at the pumps by about 20-30 cents. The price has not caught up to the market yet.
