Oil Falls to Four-Year Low on Skepticism OPEC Cut Is Sufficient

Dec. 18 (Bloomberg) -- Crude oil fell to the lowest in more than four years on skepticism that OPEC’s larger-than-expected supply cut will be enough to boost prices.

Oil extended yesterday’s 8.1 percent decline after the Organization of Petroleum Exporting Countries agreed in Oran, Algeria, that the group’s 11 members with quotas will trim current production by 2.46 million barrels a day to 24.845 million barrels a day. Oil also dropped after the U.S. government said supplies climbed for the 11th time in 12 weeks.

“It’s less than meets the eye,” said Lawrence Eagles, global head of commodities research at JPMorgan Chase & Co. in New York. “This may stem the bloating in stocks but isn’t enough to get rid of the surplus.”

Crude oil for January delivery fell as much as 87 cents, or 2.2 percent, to $39.19 a barrel and traded at $39.58 at 8:19 a.m. Singapore time on the New York Mercantile Exchange. That’s the lowest since July 13, 2004.

Prices have tumbled 73 percent from a record $147.27 on July 11. Yesterday, futures declined $3.54 to $40.06 a barrel, the lowest settlement since July 13, 2004.