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Crude prices slide below $40 a barrel
Lucy Tobin12.01.09
Oil prices today slumped to their lowest since the Christmas week, falling below $40 a barrel.
Traders fear the economic downturn will spark a slump in demand for energy, and have ignored Opec's cut in production.
Crude fell $1.85, or more than 5%, to $38.66 in New York today. In London, it slumped $2.17 to $38.66.
Members of Opec last week indicated they will reduce crude sales in February. Worldwide consumption is forecast to fall by a million barrels a day this year.
“The health of the global economy is the dominant consideration in the short term, and that is weighing down on prices,” said BNP analyst Harry Tchilinguirian.
Opec may further curb production if prices continue to fall, an official at the production group said today.
But prices quoted for futures contracts in coming months show investors forecasting that oil prices will recover.
The March contracts are trading close to $46 a barrel, while the April contracts are above $49.
Reader views (2)
To Mark Burton, where do you expect to get the power to charge the Electric Car from. Britain has destoyed it's own energy sorce under Thatcher.
- Peter Fordham, Pego, Spain
These OPEC countries have now tasted ridiculously high oil prices and won't take these lowering prices lying down. Last summer they held the whole world to ransom, ripping us all off - bring on the electric car, then we can tell OPEC to stuff their oil.
- Mark Burton, St Ives Cambs
