By Wang Lan (China Daily)
Updated: 2007-12-06 17:18

Shanghai fuel oil dropped today amid growing concerns that the global economy is slowing down, the main reason behind OPEC's December 5 decision to maintain lowered output despite repeated calls for an increase by the United States, European countries and Japan.

Related readings:  Fuel oil futures surge 4.4%  Shanghai fuel oil futures see record one-day surge  Fuel oil futures price records  Rapeseed oil futures arrive

The most actively traded fuel oil futures contract for March delivery sunk 2.96 percent, the biggest one-day drop since last year, to 3,864 yuan per ton. Tracking the price drop in the international market, Shanghai fuel oil futures have dropped an aggregate of seven percent for the past one week.

On the New York Mercantile Exchange (NYME), the most actively traded crude oil futures contract for January delivery slipped 0.48 percent to $87.07 per barrel in electronic trading. NYME crude oil futures have plummeted an aggregate of 12.2 percent from a historic high of $99.23 on November 21.

World oil consumers including those in the US, the world's largest energy user, earlier called on OPEC to pump out more crude oil to cool down prices, which surged to record highs above US$99 last month.

Analysts believe the market had undergone a price adjustment just before the opening of the OPEC meeting. They also believe the impact of the unchanged production quotas had been understood in advance.

Analysts agreed many other factors other than OPEC production also influence longer-term oil price trends.

"Many bearish factors seem to attract market attention," said Lin Hui, an analyst at Orient Securities Futures. "Traders seem to shift their attention from the unchanged OPEC production quotas to other factors that could depress prices."

Zhou Zhiqiang, an analyst at Great Wall Futures Co, said: "Uncertainties over the US economy have raised market concerns about a possible decline in oil demand in upcoming months." He added that the short-term recovery of the US dollar against Euro also helped stabilize oil prices.

The Euro fell 0.10 percent against the US dollar yesterday, its biggest one-day drop in a month.

Analysts predicted oil prices will continue significant fluctuations in the next couple weeks.