Oil Prices misused as economic barometer
The price of a barrel of oil dropped below $50 in November 2008, and it has been that way ever since. Today, it's being reported that the price has dropped again; falling below $40 mark, but petroleum has been as low as $33 back in mid-December.
"Even though the short-term geopolitical issues of Gaza are keeping the strength in oil, continuing poor economic sentiment will put a lid on prices," said Victor Shum, a senior analyst at international energy consultants Purvin and Gertz in Singapore.
Oil prices fell below the $39 a barrel level and base metals staged a broad retreat as commodity markets got off to a weak start to trading on Monday.Nymex February West Texas Intermediate fell $2.03 to $38.80 a barrel while ICE February Brent lost $1.67 to $42.75 a barrel.Analysts at Commerzbank said a renewed focus on the risks to demand has put more pressure on oil prices and pushed the WTI contract below the $40 a barrel mark.Commerzbank said Friday's US labour market data for December which showed the sharpest annual fall in jobs last year since 1945 and a rise in unemployment to its highest level in 15 years had fuelled concern about a further fall in oil demand, especially in the USA....
Oil back below $40
Due to continuing concerns that the recession is cutting into demand, crude prices head lower, despite news that Saudi Arabia plans to cut output below its target levels.
LONDON (Reuters) -- Oil fell more than $2 to below $39 a barrel on Monday, dragged down by growing evidence that recession is reducing global energy consumption.
The decline came despite news that Saudi Arabia planned to cut output to below its agreed target, as well as gas supply disruptions in Europe as a result of the Russia-Ukraine dispute and tensions in the Middle East.