Oil price falls amid concerns over global economy

06 November 2008
The price of crude oil fell for the second day running, with figures showing a drop in fuel demand in the US amid continuing concern over the global outlook for the economy.

West Texas Intermediate (WTI) oil for December delivery on the New York Mercantile Exchange traded at $64.35 a barrel on 6 November, after falling by more than $5 the previous day.

Oil traded as low as $61.30 a barrel on 28 October, a level last seen in May 2007 and the price of WTI is 60 per cent down since hitting an all-time record of $147.27 on 11 July.

The US government-run Energy Information Administration (EIA) said gasoline stocks rose by 1.1 million barrels last week, compared with a forecast drop of 650,000 barrels.

The EIA says it expects Opec output to be cut by 1.1 million barrels-a-day (b/d) by January, about 70 per cent of the 1.5 million b/d cut agreed by the organisation last month.

The market also continued to focus on concerns that the economic downturn will result in a prolonged global recession.

Figures released on 5 November showed that US companies cut about 157,000 jobs in October, the most in almost six years, and more than expected by analysts.

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