Oil still below $45 a barrel
Oil prices have remained below $45 per barrel today after closing at the lowest level since January 2005 last night.
The latest slide came as more bad US economic news soured the outlook for global growth and demand for crude. Merrill Lynch warned yesterday that the oil price could fall to 25 US dollars a barrel if the recession currently hitting the US, Europe and Japan extended to China.
The downturn means motorists in the UK are now seeing the lowest prices at the pumps since March 2007. Supermarket chain Asda recently slashed a further 1p a litre off its fuel prices, leaving the cost of a litre of petrol at 88.9p while diesel stood at 102.9p a litre.
New York-traded oil had been as high as 147.27 US dollars in July, but today light, sweet crude for January delivery was 44.20 dollars a barrel in electronic trading on the New York Mercantile Exchange. The contract fell last night by more three US dollars to settle at 43.67, the lowest for almost four years.
That was after the US government said the number of people continuing to claim unemployment benefits last week reached 4.09 million, the highest level since December 1982. And factory orders plunged by a bigger-than-expected 5.1% in October, caused by slowing demand for steel, cars, computers and heavy machinery.
Tetsu Emori, commodity markets fund manager at ASTMAZ Futures in Tokyo, said: ``It could take a while before the economy and oil prices really hit bottom. Oil seems headed below 40 dollars."
In London, January Brent crude rose 10 cents to 42.38 on the ICE Futures exchange.
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