Oil Falls Below $50, Lowest Price Since January 2007

Oil plunged below $50 a barrel on Thursday, deepening losses over the previous four sessions as battered financial markets reflected ever lower confidence in the world economy and evidence mounted of falling fuel demand.

Crude oil in New York trading fell $3.71, to $49.91 a barrel, the weakest level since January 2007.

As economic slowdown has destroyed fuel demand, oil companies plan to store millions of barrels of oil in the hope economics will improve.

Oil has lost about two-thirds of its value since July’s record above $147, in part because a global credit crunch has made investors pull their money out of riskier assets.

(ARTICLE CONTINUES BELOW)

The falls on oil have mirrored weakness on equity markets, which dropped again on Thursday when European stocks hit their lowest level since March 2003.

“Weakness in stocks reflects weakness in the economy at the moment looking forward, but I think the general trend in oil is lower anyway,” Sucden’s head of research Michael Davies said. “It’s a bit of a chicken or egg thing. Everything’s moving together, it’s hard to say what’s leading.”

Full article here