NEW YORK (Dow Jones)--Crude oil closed lower for a fourth straight session Wednesday, depleted by fresh evidence of weak demand and growing stockpiles.
Light, sweet crude for December delivery dropped 77 cents, or 1.4%, to settle at $53.62 a barrel on the New York Mercantile Exchange. Crude last settled below $54 on Jan. 22, 2007.
In late electronic trading, oil followed a steep plunge in U.S. equity markets to touch $52.79 a barrel.
U.S. crude inventories rose an eighth straight week in the week ended Nov. 14, the Energy Information Administration reported. Total U.S. oil demand fell last week, and in the last four weeks was 7% weaker than year-ago levels as economic growth falters.
"The market's pattern, that it can't hold any rallies, continues because the primary focus is the deteriorating economy," said Gene McGillian, an analyst at brokerage Tradition Energy in Stamford, Conn.
As colder weather blew into the U.S. Northeast, heating oil futures eked out a gain on the day. The EIA aided buying interest when it reported stocks of distillates, which include heating oil, fell an unexpected 1.5 million barrels last week.
December heating oil rose 18 points, or 0.1%, to $1.7597 a gallon on the Nymex.
"This the first week in the New England that it's been really cold, in the 30s" Fahrenheit, said Sarah Emerson, managing director at Energy Security Analysis Inc. in Wakefield, Mass. "Believe it or not, that seems to affect traders."
The EIA reported gasoline stockpiles rising by 500,000 barrels and gasoline demand declining by 0.4% on the week. Front-month December reformulated gasoline blendstock, or RBOB, fell 2.98 cents, or 2.6%, to settle at $1.1070 a gallon.
Nymex crude settled 63% below its July all-time peak of $145.29, and has traded below $60 all week. Daily trading ranges have narrowed as the market tests further lows.
"The market seems to have gotten to a resting point," Emerson said.
Oil's decline reflects deepening concerns about the state of the global economy. The Dow Jones Industrial Average closed down 427.47 points, or 5.1%, to 7,997.28 on fears about the future of auto makers and banks.
The Organization of Petroleum Exporting Countries plans to talk about oil's direction at a meeting scheduled for Nov. 29 in Cairo. The group's president, Chekib Khelil, told an Algerian newspaper OPEC won't take new action on output at the meeting.
"I don't think we'll take a decision as we don't have any data," said Khelil, who is also Algeria's oil minister, in the Algiers-based Al Khabar daily. "I don't think a measure needs to be taken before making sure all countries implemented the previous decisions."
OPEC last month announced a 1.5 million barrel-a-day output cut.
Oil could fall to $40 a barrel in about April of next year as the cost of production declines and the dollar strengthens, Deutsche Bank equity analysts said in a note. The analysts said OPEC may need to cut 2.5 million barrels a day in production, and noted that individual members have an incentive not to cut, as it cuts further into needed revenue.
January Brent crude on the ICE Futures exchange settled down 12 cents at $51.72 a barrel.
