Nov. 4 (Bloomberg) -- Oil may fall next week amid forecasts of an economic slowdown in Europe that may crimp fuel demand, according to a Bloomberg News survey.
European Central Bank President Mario Draghi said yesterday that Europe is heading toward a “mild recession.” The bank unexpectedly lowered interest rates yesterday by 25 basis points to 1.25 percent, citing worsening manufacturing growth. Europe also faces uncertainty because of its sovereign-debt crisis and the risk of a Greek default.
“Petroleum demand looks shaky, even with Europe muddling through the debt crisis, making it difficult for the oil market to hold current levels,” Tim Evans, an energy analyst at Citi Futures Perspective in New York, said in an e-mail.
The Paris-based Organization for Economic Cooperation and Development on Oct. 31 lowered its growth forecast for the euro area to 1.6 percent for 2011 and 0.3 percent for 2012. The region grew 1.7 percent in 2010, according to OECD estimates.
Nineteen of 31 analysts, or 61 percent, forecast oil will decline through Nov. 11. Ten, or 32 percent, predicted a gain, and two said there will be little change. Last week, 48 percent of those surveyed projected a drop.
Crude oil for December delivery has gained 48 cents, or 0.5 percent, to $93.80 a barrel this week on the New York Mercantile Exchange. Prices settled at a three-month high yesterday. Futures have risen 2.6 percent this year.
The oil survey has correctly predicted the direction of futures 47 percent of the time since its start in April 2004.
--With assistance from Christian Schmolling and Yee Kai Pin in Singapore, Winnie Zhu in Shanghai, Grant Smith and Gabi Thesing in London, Jeff Black in Frankfurt and Mark Shenk in New York. Editors: Margot Habiby, David Marino
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