Nov. 18 (Bloomberg) -- Oil was little changed near its lowest in almost 22 months before a report forecast to show that U.S. crude inventories increased for an eighth week as a recession erodes demand worldwide.

Crude oil stockpiles probably climbed 1 million barrels in the week ended Nov. 14 from 311.9 million the week before, according to a Bloomberg survey before the Energy Department's report tomorrow. Oil also declined as the dollar strengthened against the euro, undermining the appeal of commodities as a currency hedge.

``It's doom and gloom,'' said Eugen Weinberg, a Commerzbank AG analyst in Frankfurt. ``The market is playing the recession card. There could be some negative surprises still to come.''

Crude oil for December delivery dropped as much as 82 cents, or 1.5 percent, to $54.13 a barrel on the New York Mercantile Exchange. That's the lowest since Jan. 30, 2007. It traded for $55.06 at 1:22 p.m. London time.

It may be too early for OPEC, which supplies 40 percent of the world's crude, to cut output when it meets in Cairo on Nov. 29, group Secretary-General Abdalla el-Badri said, according to Kuwaiti news agency KUNA.

The Organization of Petroleum Exporting Countries called the Cairo meeting after the 1.5 million-barrel-a-day production cut announced last month failed to stem a slump in prices. Crude has lost more than $90 from its July 11 record of $147.27 a barrel.

``OPEC would damage its situation if it decides to decrease supplies in Cairo as it would be using up its most efficient weapon: production cuts,'' said Commerzbank's Weinberg.

No End-User Demand

Brent crude oil for January settlement fell as much as $1.06, or 2 percent, to $51.25 a barrel on London's ICE Futures Europe exchange. It was at $52.32 at 1:22 p.m. London time.

The Energy Department is scheduled to release its weekly report tomorrow at 10:35 a.m. in Washington.

Refineries probably operated at 84.6 percent of capacity, unchanged from the week before, Bloomberg's survey showed. Gasoline stockpiles probably increased 1 million barrels from 198.1 million barrels a week earlier, and supplies of distillate fuel likely rose 700,000 barrels from 128.4 million barrels.

``It really highlights that there isn't any end-user demand in the market,'' said Mark Pervan, a senior commodity strategist at Australia and New Zealand Banking Group Ltd. in Melbourne. ``Refinery rates were moving up toward 90 percent this time last year so it's definitely down year on year.''

The U.S. dollar rose to $1.2645 against the euro as of 1:04 p.m. in London from $1.2650 yesterday in New York.

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

Last Updated: November 18, 2008 08:26 EST