Oil falls below $93 amid slowing global economy

[October 31, 2011]  SINGAPORE (AP) -- Oil prices fell below $93 a barrel Monday in Asia as investors mulled whether slowing global economic growth justified a surge in crude this month.

Benchmark crude for December delivery was down 79 cents at $92.53 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 64 cents to settle at $93.32 in New York on Friday.

Brent crude was down 75 cents at $109.6 a barrel on the ICE Futures Exchange in London.

Crude has soared this month -- up 24 percent from $75 on Oct. 4 -- amid investor expectations European leaders would soon announce a plan to contain Greece's debt crisis. Last week, EU policymakers said they agreed to lower Greece's debt level over the next decade and require bondholders to accept 50 percent losses.

Traders are now turning their attention to the global economy, especially to weak growth in the U.S and Europe.

"We still have a crisis," United Arab Emirates Energy Minister Mohamed bin Dha'en Al Hamili told reporters at an energy conference in Singapore. "There's growth in world oil demand, but it's a very fragile situation."

Al Hamili said crude prices between $80 and $100 a barrel are reasonable and that lower prices would undermine investment in the energy industry and hurt production capacity.

Other oil industry observers were more optimistic. Shell Chief Executive Peter Voser said he expects global economic growth to slow this year from last year but to avoid a contraction.

"I don't see a double-dip recession," Voser told reporters in Singapore. Oil demand in Asia may "slightly slow down in 2012, but it's clearly going to be the growth engine of the world for many years to come."

Investors will be closely watching the latest employment figures scheduled to be announced Friday for signs about the strength of the U.S. economy. Gross domestic product grew 2.5 percent in the third quarter, allaying fears of a recession, but consumer confidence is at its lowest in almost three years.

Some analysts expect the jump in crude in October will push gasoline prices higher and undermine demand.

"The market has come a very long way in a very short amount of time," energy trader and consultant The Schork Group said in a report. "That is not to say it cannot go even farther, but it is to say that it has certainly gone far enough to start pinching consumers."

In other Nymex trading, heating oil fell 2.5 cents to $3.04 per gallon and gasoline futures slid 1.9 cents at $2.63 per gallon. Natural gas advanced 1.8 cents at $3.94 per 1,000 cubic feet.

[Associated Press; By ALEX KENNEDY]

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.