Oil prices suffer fresh fall
Oil prices today slid to 42 US dollars a barrel – the lowest level since January 2005 – after further grim news on the US economy.
With US unemployment data revealing 533,000 people lost their jobs in November, the figures were seen as another blow to demand expectations.
Light, sweet crude for January delivery plunged as low as 41.56 US dollars a barrel in New York after the employment figures were released.
The latest slide came a day after Merrill Lynch warned 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 has meant 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 its pumps at 88.9p while diesel stood at 102.9p a litre.
The AA reported an average price of 90.78p a litre for unleaded and 105.88p for diesel.
Oil prices also fell by three US dollars yesterday after it emerged US 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 was just above 40 US dollars on the ICE Futures exchange.
