Oct. 31 (Bloomberg) -- Crude oil fell, headed for its first two-month decline in New York this year, as production recovers and supplies build with the U.S. hurricane season nearing an end.

The Organization of Petroleum Exporting Countries yesterday said there have been no buyers for the extra oil it began offering on Oct. 1. Crude has fallen about $10, or 15 percent, from a record $70.85 a barrel on Aug. 30, a day after Hurricane Katrina shut 95 percent of U.S. production in the Gulf of Mexico.

``The hurricane froth has been taken out of the market,'' said Peter Luxton, an analyst with Informa Global Markets in London. ``There's no need for OPEC to raise output. There's a view that there's plenty of supply around and the anxiety that distillates might not be adequate may prove overdone.''

Crude oil for December delivery declined as much as 86 cents, or 1.4 percent, to $60.36 a barrel on the New York Mercantile Exchange, where it was down 69 cents at 10:58 a.m. London time. The price has dropped 8.6 percent this month after falling 3.9 percent in September.

U.S. crude inventories have increased during the past three weeks as imports recovered following the hurricanes, according to Energy Department statistics. Stockpiles of distillates, including heating oil and diesel, have fallen for the past five weeks, the department reported.

OPEC, the source of more than a third of the world's oil, agreed in September to effectively suspend self-imposed production quotas and offer all its capacity to markets for the first time since the 1990-1991 Iraqi invasion of Kuwait and the ensuing Gulf War. The decision was made in the wake of Hurricane Katrina, which sent average U.S. gasoline prices at the pump above $3 a gallon.

`No Requests'

``There have been no requests from clients to indicate that they need this additional spare capacity,'' Adnan Shihab-Eldin, OPEC's acting Secretary General, said yesterday in an interview in Rimini, Italy. The offer for extra oil is valid until Dec. 31.

The organization of 11 producers is confident it can meet worldwide oil demand, increasing production by 17 percent in the next five years, Shihab-Eldin said today in Moscow.

Prices may only rebound should there be unusually cold weather in the northern hemisphere as winter approaches, Luxton said. About 6 percent of U.S. refining capacity remains shut because of the hurricanes, down from as much as 29 percent the week that Hurricane Rita struck in late September.

``Given the refinery problems, it's going to require a colder than normal winter or a big drop in distillate stocks to trigger a major move in prices,'' Luxton said. Prices otherwise will probably stay in a range between $59 and $63 a barrel.

Higher Temperatures

The U.S. Northeast, where 80 percent of home heating oil is used, may be warmer than normal this week, with heating demand averaging 93 percent of normal levels from Oct. 29 through Nov. 4, U.S. forecaster Weather Derivatives Inc. said at the end of last week.

World oil demand peaks in the fourth quarter when households and businesses start buying heating fuel for the northern hemisphere winter.

Royal Dutch Shell Plc workers in the Netherlands will later today start shutting down production at the Pernis oil refinery, Europe's largest, to protest company plans to change its pension plan. Natural gas output will be cut later this week.

Workers at the 416,000 barrel-a-day refinery in Rotterdam and the chemical facility at Moerdijk will begin winding down production at 6 p.m. local time, a union spokesman said today.

``It's an excuse to push prices up,'' Luxton said. ``It will have more effect on Brent crude than on Nymex, because it's more of a European issue.''

Brent crude for December settlement fell 68 cents, or 1.1 percent, to $58.74 a barrel on London's ICE Futures exchange, previously known as the International Petroleum Exchange.

The hurricane season runs through November.

To contact the reporters on this story: Alejandro Barbajosa in London at abarbajosa@bloomberg.net

Last Updated: October 31, 2005 06:02 EST