Dec. 7 (Bloomberg) -- Oil headed for its first weekly decline since October in New York as lower economic growth forecasts for Germany and an earthquake in Japan fanned concern that fuel consumption may be curtailed.
West Texas Intermediate futures fell as much as 0.5 percent as the Bundesbank sliced more than 1 percentage point off its forecast for economic expansion in Germany next year after the sovereign debt crisis pushed the euro area into recession. A tsunami alert was issued after a magnitude 7.3 earthquake hit Japan’s northeast coast.
“Concerns about demand have currently gained the upper hand,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “We regard the scale of the price slide as exaggerated and expect prices to recover.”
Crude for January delivery was at $86 a barrel, down 26 cents, in electronic trading on the New York Mercantile Exchange at 1:08 p.m. London time. The contract slid $1.62 yesterday to $86.26, the lowest close since Nov. 15. Prices are down 3.3 percent this week and 13 percent this year.
Brent for January settlement added 7 cents to $107.10 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $21.12 to WTI. It closed at $20.77 yesterday, the narrowest gap since Oct. 19.
Germany’s Bundesbank cut its 2013 growth projection to 0.4 percent from the 1.6 percent predicted in June and said the economy, Europe’s largest, will grow 0.7 percent this year, down from its previous forecast of 1 percent. The economy will contract in the fourth quarter and stagnate in the first, the Frankfurt-based central bank said.
Crude prices may decline next week on concern that weaker economic growth will reduce fuel demand and boost inventories, a separate Bloomberg survey showed. Thirteen of 29 analysts and traders, or 45 percent, forecast crude will decrease through Dec. 14. Nine respondents, or 31 percent, predicted a gain. Seven forecast little change. Last week, 33 percent projected an increase.
Saudi Arabia, the world’s biggest crude exporter, is content with current prices in an oil market that is well supplied, the country’s petroleum minister said five days before OPEC ministers meet to discuss production.
“The prices are fine and customers are happy,” Ali Al- Naimi said in an interview in Doha, where he has been attending an international conference on climate change.
The Organization of Petroleum Exporting Countries meets in Vienna on Dec. 12. The group will probably leave its group production quota unchanged, according to a Bloomberg survey of 18 analysts. Al-Naimi didn’t comment on the quota today.