Oil prices slumped further yesterday, with Brent crude sliding below US$68 a barrel to the lowest level for more than 15 months, as slowing energy demand took its toll, traders said.
Crude oil futures were down more than 50 percent from record highs of above US$147 in July, when prices rocketed on fears of supply disruptions.
In early London trading, Brent North Sea crude for delivery in November slumped to US$67.17 a barrel — the lowest point since the middle of last year.
It later recovered to US$68.17, down US$2.63 from Wednesday’s close. The contract had ended down US$3.73 on Wednesday as mounting fears of a global recession raised expectations of a prolonged slowdown to global energy demand.
In yesterday’s trading, New York’s main futures contract, light sweet crude for delivery next month, was down US$2.06 at US$72.48 a barrel after sinking as low as US$71.21.
“Economic weakness is hitting the stock and oil markets, but the oil price fall is also reflecting a lack of demand. It is very difficult to buy oil if you are having a hard time getting credit lined up,” said Francisco Blanch, head of commodity research at Merrill Lynch.
Analysts have scaled back global demand growth estimates after a slew of gloomy data that has had a bigger market impact than OPEC talk of possible production cuts and a hurricane that has disrupted Caribbean refining operations.
Joining a series of analysts in sharply chopping back forecasts, Bernstein Research cut its oil price view for next year to US$70 a barrel from US$90 a barrel, while lowering its 2010 oil estimate to US$80 from US$95.
On Wednesday OPEC cut its estimate for growth in demand for oil this year and next year, largely because of an “excessive” easing of demand in the US.
For this year, the cartel cut its estimate for growth in demand to 550,000 barrels per day, giving average total demand of about 86.5 million barrels per day.
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