Crude Oil Prices Decline
Crude oil fell after an OPEC delegate said the group would discuss a production increase at its meeting tomorrow.
The Organization of Petroleum Exporting Countries, which is convening in Abu Dhabi, will consider either lifting output by 500,000 barrels a day or maintaining existing targets, according to an official who declined to be identified.
Crude oil for January delivery fell as much as 96 cents, or 1.1 percent, to $88.35 a barrel on the New York Mercantile Exchange.
Twenty-three of 42 analysts, expect OPEC members to maintain production at current levels, according to a Bloomberg News survey. A U.S. intelligence report that concluded Iran had halted development of nuclear weapons may have contributed to the decline in crude.
Iran halted its nuclear weapons program four years ago and hadn't resumed it as of mid-2007, according to declassified portions of the U.S. National Intelligence Estimate released yesterday. Even if the program were resumed, Iran wouldn't be able to produce enough material for a bomb until 2010 at the earliest, the report said.
The latest assessment may complicate President George W. Bush's drive for stiffer international sanctions on the Iranian government, said White House National Security Adviser Stephen Hadley.
Any reduction in tension between the U.S. and Iran would help to limit gains in oil prices and lower the pressure on OPEC to raise production, said Steve Rowles, an analyst with CFC Seymour Ltd. in Hong Kong.