Dec. 9 (Bloomberg) -- Oil headed for the biggest weekly decline since September as economic rescue measures by European leaders failed to assuage concern that growth is slowing.
West Texas Intermediate futures have lost 2.2 percent this week, as euro-area countries resolved on steps to ease the region’s crisis without forging an agreement among all European Union members. Chinese industrial production slowed last month. Saudi Arabia, the world’s largest crude exporter, is in no rush to agree to new output quotas when OPEC meets next week, Oil Minister Ali al-Naimi said.
“The details have failed to impress the market,” said James Zhang, a strategist at Standard Bank Plc in London, referring to the European measures. “We expect the euro zone crisis to drag on well into next year.”
Crude for January delivery traded at $98.74 a barrel, 0.4 percent higher on the New York Mercantile Exchange at 11:22 a.m. London time. Prices are poised for the biggest weekly decline since the period ended Sept. 23. Futures have gained 8 percent this year after climbing 15 percent in 2010.
Brent oil for January settlement on the London-based ICE Futures Europe exchange advanced 30 cents to $108.41 a barrel. The European benchmark contract was at a premium of $9.67 to New York-traded West Texas Intermediate grade. The spread was a record $27.88 on Oct. 14.
Factory output in China, the world’s second-biggest crude consumer, climbed 12.4 percent in November from a year earlier, the lowest growth since August 2009, according to the nation’s statistics bureau. Car sales rose 0.3 percent, the least in six months, the China Association of Automobile Manufacturers said.
European leaders agreed to add as much as 200 billion euros ($267 billion) to funds to fight the debt crisis and bowed to demands from the European Central Bank to tighten rules to curb deficits.
The Organization of Petroleum Exporting Countries, which meets on Dec. 14 in Vienna, will probably fail to agree on new production quotas as Saudi Arabia pumps crude at the fastest rate in more than 30 years and Iran faces losing customers because of European sanctions, according to analysts surveyed by Bloomberg News. Brent crude is down 9 percent since the last OPEC meeting on June 8.
Saudi output will be determined by “whatever the customers want,” al-Naimi said yesterday in Durban. The kingdom wants spare oil-production capacity of 1.5 million to 2 million barrels a day, he said.
European Union governments will consider imposing stiffer sanctions on Iran amid “serious and deepening concerns” over the country’s nuclear program, according to a draft EU summit statement. Foreign ministers will decide on the next set of sanctions Jan. 30, the statement showed. Japan’s government said today that it issued new sanctions against Iran.
Iran pumped about 5 percent of the world’s crude last year, based on BP Plc’s annual Statistical Review of World Energy. The country is on the Strait of Hormuz, through which about a fifth of global oil supply is transported, according to the U.S. Energy Department.
Crude may fall next week on speculation European leaders won’t calm market concern over the debt crisis, a Bloomberg News survey showed. Eleven of 27 analysts and traders, or 41 percent, forecast oil will decrease through Dec. 16. Nine respondents, or 33 percent, predicted futures will increase and seven estimated there will be little change. Last week, 46 percent of survey respondents projected a price drop.
Nymex will cut the margin requirement on crude and heating oil futures from the close of business Dec. 12, CME Group Inc., the exchange’s parent company, said yesterday. The margin for light sweet crude will be $7,560 per contract, 6.7 percent lower than the current level. The exchange last reduced the margin to $8,100 from $8,437.50 in May.
--With assistance from Yee Kai Pin, Ann Koh in Singapore and Ben Sharples in Melbourne. Editors: Rachel Graham, Raj Rajendran
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