Crude Oil Trades Near Eight-Week Low on Weak Demand Outlook

July 13 (Bloomberg) -- Crude oil was little changed near an eight-week low on speculation the global recession will sap demand for fuel and increase stockpiles.

Oil capped its biggest weekly decline since January, raising concern OPEC may hold a special meeting to discuss production limits. The producer group doesn’t need an extraordinary meeting and will review output levels in September, Venezuela President Hugo Chavez said July 10. Prices dropped as U.S. consumer confidence fell and fuel stockpiles in the largest oil consumer rose for a fourth week.

“It’s been a dose of reality,” said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney. “There’s been a lot of concern stemming from the rising gasoline stockpiles over there in the States, which doesn’t bode well for the demand side of things.”

Crude oil for August delivery was at $59.99 a barrel, up 10 cents, in after-hours electronic trading on the New York Mercantile Exchange at 8:29 a.m. in Singapore. The contract fell 0.9 percent to $59.89 on July 10, the lowest settlement since May 19.

New York oil reached an eight-month high of $73.38 on June 30. Prices gained 37 percent the preceding two months as rising equity markets emboldened investors and the falling U.S. dollar steered funds into commodities.

“The U.S. dollar is not really playing a very big role at the moment and that has kind of put the focus back on the fundamentals,” Commodity Warrants’ Hassall said. “We’re seeing a little bit of support at $60. That said, I wouldn’t be surprised to see it drift lower from here.”

Fuel Demand

U.S. gasoline demand usually peaks in June through August as motorists take to the roads for the summer holidays.

Brent crude for August settlement rose 17 cents, or 0.3 percent, to $60.69 a barrel on London’s ICE Futures Europe exchange at 8:21 a.m. Singapore time. It declined 58 cents, or 0.9 percent, to $60.52 a barrel on July 10.

Output disruption in Nigeria, Africa’s biggest oil producer, may keep prices from falling, traders said.

The Atlas Cove oil jetty and depot in Nigeria’s Lagos state is on fire after an attack late yesterday, the Movement for the Emancipation of the Niger Delta said in an e-mailed statement. Rebels claimed to have blown up a pipeline to Chevron Corp.’s export terminal in Nigeria’s Delta state on July 10.

The Organization of Petroleum Exporting Countries, which pumps 40 percent of the world’s oil, will meet on Sept. 9.