Crude oil fell to a 17-month low in New York as warm weather in the northern U.S. reduced fuel consumption and on signs OPEC won't cut production as much as pledged.

The Organization of Petroleum Exporting Countries agreed to reduce output by 1.2 million barrels a day starting Nov. 1. Prices plunged yesterday after consultant Oil Movements said November OPEC shipments will rise. The U.S. Climate Prediction Center said yesterday the El Nino weather pattern will cause a mild winter in the northern third of the U.S.

``A lot of what's happening is technical, we broke through $57 and that created a lot of selling,'' said Adam Sieminski, chief energy economist at Deutsche Bank Securities AG in New York. ``There's a huge amount of skepticism about the level of OPEC output. There seems to be a game right now between OPEC and the trading community.''

Crude oil for December delivery fell 61 cents, or 1.1 percent, to $55.65 a barrel at 10:01 a.m. on the New York Mercantile Exchange. Futures touched $54.86, the lowest since June 2005. The contract slumped $2.50 to $56.26 yesterday, the biggest one-day drop in 15 months. Prices, which plunged 6.6 percent this week, are down 1.2 percent from a year ago.

The December contract expires today. The more-active January contract fell 17 cents, or 0.3 percent, to $58.40 a barrel.

``There's always volatility when the contract expires,'' Sieminski said. ``You either have to sell it or take delivery. A lot of people obviously don't need deliveries next month.''

OPEC, which produces about 40 percent of the world's oil, will discuss production at its next meeting, which is scheduled for Dec. 14 in Abuja, Nigeria.

Home-Heating Demand

Home-heating demand in the Northeast, the region responsible for 80 percent of U.S. heating-oil use, will be 10 percent below normal through Nov. 24, said Weather Derivatives, a forecaster in Belton, Missouri.

``The decline is driven in large part by forecasts for mild weather,'' said Antoine Halff, a vice president and head of energy research at Fimat USA Inc. in New York. ``High distillate stocks in the U.S. are largely a legacy of the mild winter last year. I think this move lower will be short-lived because there have been a series of incredibly strong draws.''

Supplies of distillate fuel, including heating oil and diesel, fell 11 percent to 135 million barrels the past six weeks, according to an Energy Department report on Nov. 15. The declines left inventories last week 6.3 percent higher than the five-year average for this time of year, the department said.

Brent crude oil for January settlement fell 12 cents to $58.42 a barrel on the London-based ICE Futures exchange.