Dec. 19 (Bloomberg) -- Oil futures slumped in New York as concern mounted that rising stockpiles at Cushing, Oklahoma, will leave little room to store supplies for delivery next year.

“World crude oil prices are currently driven by barrels of crude in Cushing and not by the OPEC announcement of a 4 million barrels a day cut,” said Olivier Jakob, managing director of Petromatrix GmbH in Switzerland.

Crude oil stockpiles at Cushing, where oil that’s traded on in New York is delivered, climbed 21 percent to 27.5 million barrels last week, the highest since May 2007, the government said in a report on Dec. 17. OPEC’s biggest production cut in more than a decade this week has failed to stop the slump in prices as the deepening global recession saps demand.

Crude oil for delivery in January fell as much as 7.7% to $33.44 a barrel on the New York Mercantile Exchange. The contract expires today.

The more active February contract fell as much as 77 cents, or 1.9 percent, to $40.90 a barrel. It traded at $41.78 a barrel at 1:43 p.m. London time.

“Front-month WTI has been much weaker than anything else in the oil market,” said Mike Wittner, head of oil research at Societe Generale SA in London. “There is a lot of physical crude at Cushing.”

Brent crude for February settlement was at $43.78 a barrel, up 42 cents, on London’s ICE Futures Europe exchange at 1:08 a.m. local time. Brent oil has traded above West Texas Intermediate since Dec. 12 as the build-up in U.S. supplies suppresses New York prices.

Full Capacity

Crude inventories in Cushing may increase to full capacity within “a matter of two or three weeks,” Barclays Capital analysts led by Paul Horsnell said in a research note Dec. 17.

The Organization of Petroleum Exporting Countries, which pumps 40 percent of the world’s oil, agreed on Dec. 17 to cut output by 2.46 million barrels a day starting on Jan. 1. Still, prices have slumped 37 percent this month and are headed for the second-biggest decline in more than five years.

World oil consumption next year will drop by 0.2 percent to 85.68 million barrels a day, OPEC said in a Dec. 15 report. The U.S. Energy Department said on Dec. 9 that global demand will decline 0.5 percent to 85.3 million barrels a day.

OPEC may meet again in Kuwait on Jan. 19 to discuss further production cuts, Chakib Khelil, the president of the group, said today. OPEC will continue reducing output as demand falls, Khelil said in an interview in London.

Fog forecast for Port Arthur today may prolong the closure of the ship channel used to supply crude oil to local refineries. Dense fog is likely in coastal southeast Texas this morning, the National Weather Service said in the latest forecast on its Web Site.

To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net.

Last Updated: December 19, 2008 08:43 EST