Oil prices slid below $56 Friday as traders liquidated positions and focused on contradictory reports on OPEC's production levels. Light, sweet crude for December delivery lost 45 cents to $55.81 a barrel. The expiration of the December contract Friday was injecting additional volatility into trading as traders closed out positions. Prices typically plummet on the last trading day of a contract. The soon-to-be front-month January crude futures contract climbed 40 cents to $58.97.Oil prices for December delivery plunged to $54.86 earlier this morning, their lowest level in the past 17 months. On Thursday, the December contract lost $2.50, or more than 4%, to settle at $56.26 because of conflicting tanker traffic reports and brimming fuel supplies.
Those same factors helped crude extend its decline Friday. Petrologistics, a Geneva-based oil consultancy, expects OPEC production will fall by 1.1 million barrels per day, in line with the cartel's announced cut, according to Dow Jones. But Oil Movements in London predicted OPEC will export 210,000 more barrels in the month ending Nov. 4 for a total of 24.84 million. For the rest of this month, shipments will climb by 40,000 barrels.
| Instapundit notes a proposal by the Tigerhawk to trade a new carbon tax for making permanent the larger part of the Bush tax cuts -- do it now while prices are coming down. Not sure if I like that, but anything that would hurt the House of Saud and the Mad Mullahs™ in Teheran would be fine with me. |