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Crude oil falls after Russia lifts export limits on fuel oil

Crude oil fell to three-week low Friday on speculation that OPEC and rival producers such as Russia will have difficulty limiting supplies to boost prices.

Russia ended limits on fuel oil exports, clearing the way for refiners to raise shipments of refined products. The country is one of the non-OPEC producers that are scaling back crude oil exports, and higher shipments of products such as heating fuel might negate the impact of the reductions, analysts said.

"What the market does depends on the success of these cuts," said Bill O'Grady, director of fundamental futures research at AG Edwards & Sons Inc in St. Louis.

"The Russian moves [on Friday] don't inspire confidence in their success."

Crude oil for February delivery fell US$0.70, or 3.4 percent, to US$19.68 a barrel on the New York Mercantile Exchange, the lowest closing price since Dec. 21. Prices fell 9 percent this week, the biggest decline since the week ended Nov. 16. Oil is down 33 percent from a year ago, as recession in the US and other consuming countries weighed on fuel demand.

In London, Brent crude oil for February settlement fell US$0.43, or 2 percent, to US$20.86 a barrel on the International Petroleum Exchange.
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