Dec. 4 (Bloomberg) -- Crude oil fell in New York as traders speculated OPEC may keep output unchanged this week and the U.S. said the nuclear threat from Iran had diminished.

Twenty-three of 42 analysts, or 55 percent, expect OPEC members to maintain production at current levels when they meet in Abu Dhabi tomorrow, according to a Bloomberg News survey. A U.S. intelligence report concluded Iran has halted development of nuclear weapons.

``Oil's likely to hover around $90 until we get a firm decision from Abu Dhabi,'' said Robert Montefusco, a broker at Sucden (U.K.) Ltd. in London. ``Latest intelligence on Iran shows they're a long way off creating a nuclear weapon, so the bearish tone's prevailing.''

Crude oil for January delivery was at $88.74 a barrel, down 57 cents, in after-hours electronic trading on the New York Mercantile Exchange at 9:33 a.m. in London. Earlier, the contract rose as much as 67 cents, or 0.8 percent, to $89.98.

Oil rose 60 cents, or 0.7 percent, to $89.31 a barrel yesterday, leaving prices 9.6 percent below the record $99.29 reached on Nov. 21.

Iran halted its nuclear weapons program four years ago and hadn't resumed it as of mid-2007, according to declassified portions of the U.S. National Intelligence Estimate released yesterday. Even if the program were resumed, Iran wouldn't be able to produce enough material for a bomb until 2010 at the earliest, the report said.

Iran Sanctions

The latest assessment may complicate President George W. Bush's drive for stiffer international sanctions on the Iranian government, said White House National Security Adviser Stephen Hadley.

Any reduction in tension between the U.S. and Iran would help to limit gains in oil prices and lower the pressure on OPEC to raise production, said Steve Rowles, an analyst with CFC Seymour Ltd. in Hong Kong.

``I don't think OPEC will raise production because there has been little supply-side geopolitical tension,'' said Rowles. ``The U.S. inventory numbers out tomorrow could affect oil prices more.''

An Energy Department report tomorrow will probably show U.S. crude-oil stockpiles fell 900,000 barrels last week, based on the median estimate from a Bloomberg News survey of 10 analysts. Inventories held 313.2 million barrels on Nov. 23, or 3 percent more than the five-year average for the period.

Brent Falls

Brent crude oil for January settlement traded at $89.38 a barrel, down 42 cents, on the London-based ICE Futures Europe exchange at 9:35 a.m. London time. Earlier, the contract rose as much as 65 cents, or 0.7 percent, to $90.45. Yesterday, it closed at a premium to the Nymex futures for the first time since July.

``Brent has been definitely the better performer'' in recent weeks, said Tom Hartmann, commodity broker at Altavest Worldwide Trading Inc. in Mission Viejo, California. ``It could be some sort of bet on the dollar. The world is shifting to a different product as their standard.''

Gasoline stockpiles probably gained 1.2 million barrels last week, while distillates, including heating oil and diesel, probably declined by 150,000 barrels, based on the survey.

Oil prices plunged last week after crude oil stockpiles fell less than forecast, even as refiners unexpectedly increased operating rates to a 10-week high. Analysts say refining rates may have risen to 89.5 percent, the fourth gain in five weeks.

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

Last Updated: December 4, 2007 04:37 EST