Oil below $95 on US concerns

Crude oil fell as signs of slowing growth in the US economy dented investor confidence that prices will reach $100 a barrel.

Rising fuel costs may have slowed retail spending growth in the US, the world's largest oil user, to a four-month low in October, according to a Bloomberg survey.

Saudi Oil Minister Ali al-Naimi and Kuwait's acting oil minister said that the Organization of Petroleum Exporting Countries (Opec) may discuss raising output to ease near-record prices, AFP reported yesterday.

"Demand in the US is slower than last year, and that's before the latest prices have transferred to retail prices," said Olivier Jakob, managing director of Petromatrix in Zug, Switzerland. "We will see some profit-taking this week."

Crude oil for December delivery declined $1.46, or 1.5 per cent, to $94.86 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $95.49 at 9:51 am in London.

Oil reached a record $98.62 a barrel last week as the sliding US dollar attracted investors to commodities and after a report showed US stockpiles fell for a third week.

Minister Naimi of Saudi Arabia, the world's largest oil producer, told reporters during a visit to Kuwait "it is premature" to speak of an increase in output and that "when Opec meets, we will discuss the issue," according to AFP.

Opec will "not hesitate to shoulder its responsibilities," AFP cited Kuwait's acting Oil Minister Mohammed al-Aleem as saying.

Brent crude oil for December settlement dropped as much as $1.41, or 1.5 per cent, to $91.77 a barrel on the London-based ICE Futures Europe exchange.

It was at $92.72 at 9:52 am London time.

The contract rose 0.4 per cent to $93.18 on November 9, a gain of 1.2 per cent for the week. Hedge fund managers and other large speculators raised their bets on rising prices to a three-month high last week, according to US Commodity Futures Trading Commission data.

Their net-long position, the difference between orders to buy and sell oil, rose 27 per cent to 22,696 contracts on November 6, the commission said.

As of November 9, investors held 41,133 options to sell December oil for $100 a barrel, according to the Nymex Web site. The options expire tomorrow.