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Crude oil settles below 50 dollars

by BuaNews Online
on 21 Nov 2008
BuaNews Online
BuaNews Online

Crude oil fell to its lowest level in more than three years on Thursday as the global economic downturn pared energy consumption.

Light, sweet crude for December delivery dropped $4 to settle at $49.62 a barrel on the New York Mercantile Exchange. The price slid to as low as $48.64 a barrel, the lowest level last seen in May 2005.

In London, Brent crude for January delivery fell $2.17 to $49.55 a barrel on the ICE Futures Exchange.

"The price of oil continues to demonstrate weakness as the commodity has decisively violated the psychologically important price level of $50 per barrel," Wall Street Strategies' senior research analyst Conley Turner said.

"At this juncture, the oil patch and oil related securities appear to present a lot of value to investors."

With economic growth in United States, Japan and Europe contracting, global oil demand is heading for the first annual decline in 25 years. Oil prices have lost nearly 66 percent since record high of $147.27 a barrel reached in mid-July.

"However, this does not mean that it cannot get any cheaper. At this juncture, oil traders are following the stock market in the serve correction that is unfolding," Mr Turner said.

US stocks tumbled Thursday as the Labour Department reported a highest jobless level in 16 years and Citigroup Inc's shares shed another 25 percent as investors questioned the bank's ability to withstand billions of additional loan losses in 2009.

Libya's top oil official told press on Thursday that OPEC may decide to take an another production cut at its meeting in Cairo next week.

But many analysts doubt if the OPEC supply cut can stable the oil price as its previous decision to reduce output had little impact.

"Below $49 per barrel, oil is likely to trade in the low $40 in the next few weeks," Mr Turner said. - BuaNews-Xinhua

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