Oil Falls as Growth Outlook Saps Confidence in $100 Oil Price

Crude oil fell in New York as signs of slowing growth in the U.S. economy dented investor confidence that prices will get to $100 a barrel.

Rising fuel costs may have slowed retail spending growth in the U.S., the world's largest oil user, to a four-month low of 0.2 percent in October, according to a Bloomberg survey of economists. Prices near $100 a barrel are excessive and oil may return to between $80 and $85 a barrel within a month, Reuters reported Nigerian Oil Minister Odein Ajumogobia saying Nov. 10.

``When you are seeing expectations of weak numbers coming to the market I really don't see why you can see oil at these levels'', said Jonathan Barratt, managing director of Commodity Broking Services in Sydney. ``We certainly do have enough supply.''

Crude oil for December delivery fell as much as $1.28, or 1.3 percent, to $95.04 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $95.32 at 11:12 a.m. in Singapore.

Oil reached a record $98.62 a barrel last week as the sliding U.S. dollar attracted investors to commodities and after a report showed U.S. stockpiles fell for a third week.

Last week's 0.4 percent gain was the smallest in five weeks, and prices were supported by a storm that cut production in some North Sea fields.

StatoilHydro ASA, BP Plc and ConocoPhillips resumed production Nov. 9 after the storm abated. U.S. equity prices dropped to a two-month low the same day as banks reported mounting losses on bad home loans.

`Volatile Week'

Brent crude oil for December settlement dropped as much as 98 cents, or 1.1 percent, to $92.20 a barrel on the London-based ICE Futures Europe exchange. It was at $92.30 at 11:07 a.m. Singapore time.

The contract rose 0.4 percent to $93.18 on Nov. 9, a gain of 1.2 percent for the week.

``It's going to be a particularly volatile week for oil,'' said David Moore, commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. ``It may well go above the $100 mark but we don't expect it will be sustained.''

Hedge fund managers and other large speculators raised their bets on rising prices to a three-month high last week, according to U.S. Commodity Futures Trading Commission data.

Their net-long position, the difference between orders to buy and sell oil, rose 27 percent to 22,696 contracts on Nov. 6, the commission said. As of Nov. 9, investors held 41,133 options to sell December oil for $100 a barrel, according to the Nymex Web site. The options expire tomorrow.