Games With Oil

Ali al-Naimi, the oil minister of Saudi Arabia, OPEC’s largest exporter and its de facto leader, said in Cairo that $75 a barrel oil represents a “fair price” needed to support investment in new fields. The group’s next meeting is in Oran, Algeria, on Dec. 17.

Oil fell as much as $99.02 a barrel from its July record, making the four-month slump steeper than crude’s drop from its 1996 peak to the low set in December 1998.

At that time the hesitation of countries including Iraq, Venezuela and Russia to rein in output amid the Asian financial crisis and a warm U.S. winter contributed to the decline. Now, sinking demand is the main issue as the world’s largest economies slip into recession.

Crude oil for January delivery fell $5.15, or 9.5 percent, to $49.28 a barrel at 2:47 p.m. on the New York Mercantile Exchange, the lowest settlement since May 23, 2005. It was the biggest one-day drop since Oct. 10.

Supplies Rise

OPEC, the International Energy Agency and the U.S. Energy Department reduced consumption projections in November because of the economic outlook. OPEC trimmed its forecast for average oil use next year by 530,000 barrels, or 0.6 percent, and the IEA cut its estimate by 670,000 barrels, or 0.8 percent.