Oil traded near a one-year low in New York on speculation that OPEC won't be able to meet its production cut pledges while U.S. crude inventories remain 12 percent above the five-year average.

Crude plunged 4.3 percent yesterday after the U.K.-based consultant Oil Movements said November shipments by OPEC will rise. OPEC agreed to cut output by 1.2 million barrels a day starting this month. Crude inventories rose 1.2 million barrels to 336 million last week, according to the U.S. Department of Energy.

``We need to see whether OPEC complies with the cuts,'' said Peter Luxton, a London-based energy analyst at Informa Global Markets. ``Some reports suggest they don't.''

Crude oil for December delivery fell 16 cents to $56.10 a barrel in after-hours electronic trading on the New York Mercantile Exchange at 9:59 a.m. in London. The contract, which expires today, yesterday slumped $2.50 to $56.26, the biggest one- day decline since Aug. 17, 2005. Oil is set for the biggest weekly decline since October 2005.

Crude also fell because traders said heating fuel demand in the U.S. may be less than expected. Above-average temperatures in parts of the U.S. will cut demand, the government said yesterday.

The more actively New York-traded contract for January settlement was unchanged at $58.57 a barrel. Brent crude oil for January delivery rose 6 cents to $58.60 a barrel on the ICE Futures exchange at 9:59 a.m. London time.

The decline in oil prices prompted a drop in European oil stocks including BP Plc and Royal Dutch Shell Plc. The Dow Jones Stoxx 600 Index dropped 0.2 percent to 360.48 as of 9:41 a.m. in London.

Oil Company Shares

BP, Europe's second-largest oil company by market value, slid as much as 2.3 percent to 584.5 pence and traded at 590.5 pence at 9:39 a.m. in London. Shell, Europe's biggest, retreated at much as 1.4 percent to 1,852 pence and was at 1,863 pence at 09:38 a.m. in London.

The Organization of Petroleum Exporting Countries, which produces about 40 percent of the world's oil, agreed last month to reduce production by 1.2 million barrels a day starting Nov. 1 in an attempt to end a three-month price slide. The group will discuss production at its next meeting, scheduled for Dec. 14 in Abuja, Nigeria.

The OPEC crude oil basket price rose 14 cents to $55.47 a barrel yesterday, the group said in an e-mail. The price is a weighted average of 11 crude blends produced by OPEC nations.

``Market participants were skeptical whether OPEC would fully accomplish'' the reduction, said Andy Sommer, an analyst at HSH Nordbank AG in Hamburg. ``Now it is obvious it is less than expected.''

Mild Weather

Above-average temperatures will cover the northern third of the U.S. from coast to coast this winter as an El Nino weather pattern persists, the U.S. Climate Prediction Center said yesterday in a report that covers December through February. A warmer-than-normal winter in the region would reduce demand for fuels used to run household and commercial furnaces.

``There is no enthusiasm to drive oil higher,'' Informa Global's Luxton said. ``Psychology for the price is negative.''

U.S. natural-gas inventories climbed 5 billion cubic feet last week, for the first week in three, to 3.45 trillion, the Department of Energy said yesterday. The gain left stocks the highest they've ever been at this time of year and ample to handle peak demand during winter.

Gas for December delivery rose 2 cents to $7.775 per million British thermal units on the New York Mercantile Exchange at 9:40 a.m. in London. The contract yesterday fell 36.5 cents, or 4.5 percent.

Next Week

Crude oil may rebound next week on speculation that U.S. fuel supplies will fall as the Northern Hemisphere winter approaches. Twenty-seven of 52 analysts, traders and brokers, or 52 percent, said prices will increase, according to a Bloomberg News survey. Five expect a decline and 20 forecast little change.

The survey was conducted before prices plunged yesterday on the OPEC crude supply report and the U.S. weather forecast.

OPEC's shipments rose 0.9 percent in the month to Dec. 2 to 24.8 million barrels a day from the four weeks ended Nov. 4, Oil Movements said in a weekly report yesterday.

El Nino refers to the warming of the ocean surface off the western coast of South America. The phenomenon affects the jet stream, alters storm tracks and creates unusual weather patterns. A moderate to strong El Nino typically brings mild winters to the northern U.S.