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 "All the economic figures are pointing to demand destruction, and that's not going to change soon," said Christoffer Moltke-Leth, head of sales trading for Saxo Capital Markets in Singapore. "There seems to be no end to the bad news from economic data."
Investors eyed more evidence that plummeting consumer demand from the U.S. and Europe is undermining growth in export-dependent Asia, as production at major Japanese manufacturers fell by its largest margin ever in November.
Japanese industrial production fell 8.1 percent in November from a month earlier, the largest drop since the government began measuring such data in 1953, the Ministry of Economy, Trade and Industry said Friday.
The decline followed a 3.1 percent drop in October, and the government expects another 8 percent plunge in December.
"These are pretty ugly figures that show the recession deepened in Japan," Moltke-Leth said. "I don't see any catalyst to bring crude higher. We'll likely test $30."
Many companies will likely report dismal earnings for the fourth quarter and may use the lowered expectations to include massive writedowns or one-time charges, Moltke-Leth said.
"I think a lot of CEOs want to put everything bad into the fourth quarter because the market expects it to be bad so why not put everything you can in there," he said. "There's going to be a lot of bad corporate news during the next few weeks, and that's going to reinforce the demand destruction theme for crude."
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 OPEC production cuts have failed to boost prices, as investors focus on collapsing consumer demand. The Organization of Petroleum Exporting Countries, which accounts for about 40 percent of global supply, said last week it would slash production by 2.2 million barrels a day, its largest cutback ever, adding to a 1.5 million output quotas reduction in November.
OPEC President Chakib Khelil said earlier this week the group may meet in Kuwait City on Jan. 19 to discuss further production cuts. The group's next official meeting is March 15 in Vienna.
"I don't think OPEC can do much," Moltke-Leth said. "The market will have serious doubts about how disciplined will they be if they make another cut."
In other Nymex trading, gasoline futures were steady at 79 cents a gallon. Heating oil gained 3.87 cents to $1.24 a gallon while natural gas for January delivery fell 3.1 cents to $5.88 per 1,000 cubic feet.
In London, February Brent crude rose 94 cents to $37.55 a barrel on the ICE Futures exchange.
[Associated
Press; By ALEX KENNEDY]
Copyright 2008 The Associated Press. All rights reserved. This
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