By Grant Smith and Christian Schmollinger Jan. 25 (Bloomberg) -- Crude oil traded near a one-month low as sliding equity markets and expectations of interest-rate increases in China dented investor confidence in the strength of the global economic recovery. OPEC nations must improve their compliance with the group’s output quotas to prevent further pressure on oil prices, Shokri Ghanem, chairman of Libya’s National Oil Corp., said yesterday. Hedge-fund managers and other large speculators reduced their bets on rising oil prices for the first time in five weeks, according to U.S. Commodity Futures Trading Commission data. “Weakness in the stock markets and the prospects of monetary tightening in China helped trigger the exit of some speculative money,” said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. “But with OPEC ready to act if there’s further weakening, I think prices may be nearing a bottom.” Crude oil for March delivery was at $74.28 a barrel, down 26 cents, in after-hours electronic trading on the New York Mercantile Exchange at 9:40 a.m. in London. Earlier the contract fell as much as 43 cents, or 0.6 percent, to $74.11. Futures dropped 2 percent to $74.54 on Jan. 22, the lowest settlement since Dec. 22. Brent oil for March settlement was at $72.89 a barrel, up 6 cents, at 9:39 a.m. on the London-based ICE Futures Europe exchange. It fell 2.4 percent to $72.83 on Jan. 22. Prices in New York slumped 4.9 percent last week as U.S. gasoline stockpiles reached a 22-month high, equities and commodities tumbled on the nation’s bank reform plans, and investors fretted that China will raise interest rates to slow growth in the world’s second-largest energy consumer. China Focus China “brought the focus back to still-weak demand from a lot of the advanced economies,” said Toby Hassall, commodity analyst at CWA Global Markets Pty in Sydney. “If we do see equities continue their sell-off this week that would certainly suggest that oil could follow.” European stocks fell for a fourth day, the longest losing streak in two months, after U.S. shares plunged the most since October and Ericsson AB reporting disappointing earnings. The Dow Jones Stoxx 600 Index lost 0.1 percent to 249.61 at 9:33 a.m. in London. The Sabine Neches Waterway, the Texas ship channel serving four refineries that process about 6.5 percent of total U.S. capacity, remained closed indefinitely after a collision between a tanker and vessel spilled about 11,000 barrels of oil, the U.S. Coast Guard said. Fuel Stockpiles Four refineries around the waterway have a combined processing capacity of 1.15 million barrels of oil a day. New York oil futures reached a 15-month high of $83.95 a barrel on Jan. 11 as rising equity markets emboldened investors and traders speculated freezing temperatures in Europe and the U.S. would help draw down above-average distillate supplies. Prices plunged 10 percent during the past two weeks as U.S. fuel stockpiles and temperatures rose, China increased reserve requirements for its banks, and the Standard & Poor’s 500 Index fell to a seven-week low. Speculative net-long positions, the difference between orders to buy and sell the commodity, fell 1 percent to 134,381 contracts in the week ended Jan. 19, the U.S. Commodity Futures Trading Commission said last week. Positions a week earlier were the highest in at least 27 years. To contact the reporters on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.netGrant Smith in London at gsmith52@bloomberg.net

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