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By Samuel R. Avro on Dec 2, 2008 with no responses

Crude Oil Closes Below $47 as Demand Decreases

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Oil settled below $47 a barrel on Tuesday, largely due to the news that OPEC member nations only complied with two-thirds of its pledged output cuts from last month.

A Reuter’s survey showed that OPEC members only cut 66 percent of their 1.5 million barrel target.

U.S. crude settled down 4.7 percent, dropping $2.32 to $46.96. London Brent also traded lower.

Crude oil prices have fallen nearly $100 per barrel since it peaked in July at over $147.

OPEC nations are concerned about the supply glut and may very well opt to cut output once again. “We are concerned about the glut … I think there is an indication that we will have another cut,” Qatar Oil Minister Abdullah al-Attiya said. The next OPEC meeting is scheduled for Dec. 17 in Algeria.

On Wednesday, the Energy Department’s weekly report on oil inventory is due out. In a Reuter’s poll of analysts, it showed that the crude inventories likely rose by 1.7 million barrels in the past week. If true, that would be the third consecutive weekly rise as inventories build up due to the lowering demand caused by the global financial crisis.