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<TR>Dec 6, 2008
</TR><!-- headline one : start --><TR>Oil falls to nearly US$40 <!--10 min-->
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Oil prices have plunged by more than two-thirds since reaching record highs above 147 dollars on July 11 as global economic slowdown widened, weakening demand. -- PHOTO: ASSOCIATED PRESS
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NEW YORK - CRUDE oil prices plunged to four-year lows on Friday as shockingly weak jobs data in the United States raised prospects of a severe fall in energy demand.
The contract for light, sweet crude for January delivery closed at 40.81 dollars (S$62.17) a barrel on the New York Mercantile Exchange, down a hefty 2.86 dollars from Thursday's close.
The New York contract brushed the 40-dollar psychological barrier in intraday trade, sinking to 40.50 dollars, its lowest level since December 2004.
In London, Brent North Sea crude for January slid 2.54 dollars to settle at 39.74 dollars, a low last seen in January 2005.
Oil prices extended their slide after the US Labour Department reported employers slashed a staggering 533,000 jobs in November, sending the unemployment rate to a 15-year high of 6.7 per cent, its highest level since October 1993.
The number of job losses was the largest in 34 years and much higher than the 325,000 expected by private forecasters, suggesting the recession in the world's largest economy would be longer and deeper than feared.
Oil prices have plunged by more than two-thirds since reaching record highs above 147 dollars on July 11 as global economic slowdown widened, weakening demand.
'The wild bull era is over,' said Mr Phil Flynn at Alaron Trading.
Oil prices began the week sharply weaker after the Organsation of the Petroleum Exporting Countries (Opec), which pumps 40 per cent of the world's oil, over the weekend postponed a decision on cutting output to a December 17 meeting.
In a precipitous slide, oil prices sank Wednesday below 45 dollars for the first time since 2005.
Mr Flynn noted the oil price spike had been driven by strong global economic growth, cheap money and available credit, conditions that have evaporated amid the global financial crisis that accelerated in September.
'We are now entering a new era of lower and more stable oil prices for years to come. That does not mean we will not see other bull markets along their way but get used to the markets trading different than they did throughout most of this decade,' he said.
The International Energy Agency (IEA) on Friday lowered its projections for global oil demand in 2008-2013, foreseeing annual growth of 1.2 per cent instead of 1.6 per cent amid the worldwide economic slump.
The IEA forecast demand for oil products would climb from 86.2 million barrels a day in 2008 to 91.3 million in 2013, lowering its July forecasts.
The US, eurozone, Japan and other economies are already in recession, and investors are worried about falling oil demand among the industrialized countries and a slowdown in major emerging countries such as China.
'Under these circumstances, it is impossible to assign any price as an eventual bottom. But barring the appearance of a workable hydrogen fuel cell next month, the bottom must be near,' said Mr John Kilduff at MF Global.
In a bright spot, Mr Kilduff noted that 'the crash in energy prices is incredibly simulative to the economy'. Mr David Moore, a commodities strategist with the Commonwealth Bank of Australia, disagreed with the notion that prices have hit a floor.
It is 'way, way premature' to think that the market has hit bottom, Mr Moore said. 'The focus is well and truly on the weakness in consumption, and that doesn't seem likely to go away in the next 24 hours.' -- AFP
</TR>
<TR>Dec 6, 2008
</TR><!-- headline one : start --><TR>Oil falls to nearly US$40 <!--10 min-->
</TR><!-- headline one : end --><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
Oil prices have plunged by more than two-thirds since reaching record highs above 147 dollars on July 11 as global economic slowdown widened, weakening demand. -- PHOTO: ASSOCIATED PRESS
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"-->
NEW YORK - CRUDE oil prices plunged to four-year lows on Friday as shockingly weak jobs data in the United States raised prospects of a severe fall in energy demand.
The contract for light, sweet crude for January delivery closed at 40.81 dollars (S$62.17) a barrel on the New York Mercantile Exchange, down a hefty 2.86 dollars from Thursday's close.
The New York contract brushed the 40-dollar psychological barrier in intraday trade, sinking to 40.50 dollars, its lowest level since December 2004.
In London, Brent North Sea crude for January slid 2.54 dollars to settle at 39.74 dollars, a low last seen in January 2005.
Oil prices extended their slide after the US Labour Department reported employers slashed a staggering 533,000 jobs in November, sending the unemployment rate to a 15-year high of 6.7 per cent, its highest level since October 1993.
The number of job losses was the largest in 34 years and much higher than the 325,000 expected by private forecasters, suggesting the recession in the world's largest economy would be longer and deeper than feared.
Oil prices have plunged by more than two-thirds since reaching record highs above 147 dollars on July 11 as global economic slowdown widened, weakening demand.
'The wild bull era is over,' said Mr Phil Flynn at Alaron Trading.
Oil prices began the week sharply weaker after the Organsation of the Petroleum Exporting Countries (Opec), which pumps 40 per cent of the world's oil, over the weekend postponed a decision on cutting output to a December 17 meeting.
In a precipitous slide, oil prices sank Wednesday below 45 dollars for the first time since 2005.
Mr Flynn noted the oil price spike had been driven by strong global economic growth, cheap money and available credit, conditions that have evaporated amid the global financial crisis that accelerated in September.
'We are now entering a new era of lower and more stable oil prices for years to come. That does not mean we will not see other bull markets along their way but get used to the markets trading different than they did throughout most of this decade,' he said.
The International Energy Agency (IEA) on Friday lowered its projections for global oil demand in 2008-2013, foreseeing annual growth of 1.2 per cent instead of 1.6 per cent amid the worldwide economic slump.
The IEA forecast demand for oil products would climb from 86.2 million barrels a day in 2008 to 91.3 million in 2013, lowering its July forecasts.
The US, eurozone, Japan and other economies are already in recession, and investors are worried about falling oil demand among the industrialized countries and a slowdown in major emerging countries such as China.
'Under these circumstances, it is impossible to assign any price as an eventual bottom. But barring the appearance of a workable hydrogen fuel cell next month, the bottom must be near,' said Mr John Kilduff at MF Global.
In a bright spot, Mr Kilduff noted that 'the crash in energy prices is incredibly simulative to the economy'. Mr David Moore, a commodities strategist with the Commonwealth Bank of Australia, disagreed with the notion that prices have hit a floor.
It is 'way, way premature' to think that the market has hit bottom, Mr Moore said. 'The focus is well and truly on the weakness in consumption, and that doesn't seem likely to go away in the next 24 hours.' -- AFP
