Nov 20 2008
Oil Prices Continue to Fall
Oil prices have fallen to below $50 per Barrel for the first time since 2005, due to continued fears of recession and drop in demand.
US light sweet crude fell to $49.06, while London-traded Brent crude fell to $48.90 a barrel. Compare this to the price in July, when it hit an incredible $147 per barrel.
Crude oil prices had been fuelled by commodities dealers gambling on ever increasing demand for the product. These same dealers however are now abandoning oil, as US stocks of crude oil increased by 1.6 million barrels last week - twice as much as expected.
Investors had been hoping for a continued growth in oil demand from China, but it has been weakening there, as well as in the US.
The price drop is in spite of expectation that OPEC will decide to cut oil production when they meet again on November 29.
In spite of these recent drops in oil value however, in its World Energy Outlook for 2008, the International Energy Agency says the era of cheap oil is over and prices could soon be back up to $100 a barrel, with prices soaring to as high as $200 a barrel by 2030.
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