Friday, December 19, 2008
Evidence of global downturn deepened on Friday as oil prices plunged again, Japan slashed interest rates to near zero to stave off recession and a top banking association warned the world economy will contract in 2009.
The price of New York oil dropped to below 34 dollars a barrel — the lowest level since 2004 — as weak global demand overshadowed a record cut in output that was announced this week by the OPEC cartel of major oil producers.
“The global recession continues to sap demand… Even after OPEC cut production by more then two million barrels, oil prices have fallen below the 40 dollar per barrel level,” said BetOnMarkets analyst David Evans.
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Speaking on the sidelines of an oil conference in London, OPEC head Chakib Khelil said the cartel, which includes the world’s biggest producer Saudi Arabia, would continue cutting output until the price stabilised.
British Prime Minister Gordon Brown, who has complained about major producers pushing up the price of oil, told the conference that price volatility was “in no-one’s interest” and called for greater stability.
Prices have plunged since record highs of 147 dollars per barrel in July.
The downbeat mood was reflected on European stock markets, with the FTSE 100 in London plummeting 2.54 percent in afternoon trading, the Frankfurt DAX plunging 1.79 percent and the Paris CAC 40 index down 1.76 percent.
This article was posted: Friday, December 19, 2008 at 12:42 pm