<TABLE id=msgUN cellSpacing=3 cellPadding=0 width="100%" border=0><TBODY><TR><TD id=msgUNsubj vAlign=top>Coffeeshop Chit Chat - Oil prices fall below US$40</TD><TD id=msgunetc noWrap align=right>
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</NOBR> </TD><TD class=msgDate noWrap align=right width="30%">4:58 am </TD></TR><TR class=msghead><TD class=msgT noWrap align=right width="1%" height=20>To: </TD><TD class=msgTname noWrap width="68%">ALL <NOBR></NOBR></TD><TD class=msgNum noWrap align=right> (1 of 6) </TD></TR></TBODY></TABLE></TD></TR><TR><TD class=msgleft width="1%" rowSpan=4> </TD><TD class=wintiny noWrap align=right>4034.1 </TD></TR><TR><TD height=8></TD></TR><TR><TD class=msgtxt><TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR><TD>Oil prices fall below US$40, then recover a little
</TD></TR><TR><TD><!-- headline one : end --></TD></TR><TR><TD>Four-and-a-half-year lows seen despite Opec's supply-cut decision</TD></TR></TBODY></TABLE>
SINGAPORE: Oil prices fell to 4 1/2-year lows yesterday in Asia as investor pessimism over global crude demand outweighed Opec's largest-ever production cut.
Light, sweet crude for January delivery was down 6 cents to US$40 a barrel in electronic trading on the New York Mercantile Exchange (Nymex) by mid-afternoon in Singapore. At one point, it fell as low as US$39.19 - a level not seen since at least July 2004.
Overnight, the contract fell US$3.54 to settle at US$40.06 a barrel, after touching US$39.88.
The 13-nation Organisation of Petroleum Exporting Countries said on Wednesday that it planned to reduce its output quotas by 2.2 million barrels a day.
But markets had already expected a vastly reduced flow of oil and traders focused instead on troubling economic data that points to a long and severe global economic slump.
'The market apparently had already priced in this cut,' said Mr Peter McGuire, managing director at investment firm Commodity Warrants Australia, in Sydney. 'I think Opec will have to have another meeting in January, and I wouldn't be surprised to see possibly a three million cut next time.' Opec's next official meeting is scheduled for March. The group had already announced cuts totalling two million barrels earlier this year, also with little effect. The unprecedented production cuts and the market reaction show just how fast energy demand has fallen during the worst economic downturn in at least a generation.
Oil prices have tumbled 73 per cent since July. What started as a crisis in the US sub-prime mortgage sector last year has mushroomed into a recession in most developed countries and a sharp downturn in emerging nations.
Companies across the world are laying off workers and banks are reluctant to lend. Plunging property values and high debt levels have led many consumers to pull back spending.
'I'm worried about growth,' Mr McGuire said. 'You have to get people spending.' Oil prices may fall as low as US$35 a barrel during the next few weeks, he said.
US crude inventories rose slightly last week and gasoline reserves increased as demand stayed below year-ago levels, according to government data released on Wednesday.
Analysts had expected crude stocks to fall by 900,000 barrels, according to a survey by Platts, the energy information arm of McGraw-Hill.
In other Nymex trading, petrol futures were steady at US$1 a gallon. Heating oil was steady at US$1.44 a gallon while natural gas for January delivery fell 2.4 cents to US$5.60 per 1,000 cubic feet. In London, February Brent crude rose 2 cents to US$45.55 a barrel on the ICE Futures exchange. ASSOCIATED PRESS
[email protected]
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</TD></TR><TR><TD><!-- headline one : end --></TD></TR><TR><TD>Four-and-a-half-year lows seen despite Opec's supply-cut decision</TD></TR></TBODY></TABLE>
SINGAPORE: Oil prices fell to 4 1/2-year lows yesterday in Asia as investor pessimism over global crude demand outweighed Opec's largest-ever production cut.
Light, sweet crude for January delivery was down 6 cents to US$40 a barrel in electronic trading on the New York Mercantile Exchange (Nymex) by mid-afternoon in Singapore. At one point, it fell as low as US$39.19 - a level not seen since at least July 2004.
Overnight, the contract fell US$3.54 to settle at US$40.06 a barrel, after touching US$39.88.
The 13-nation Organisation of Petroleum Exporting Countries said on Wednesday that it planned to reduce its output quotas by 2.2 million barrels a day.
But markets had already expected a vastly reduced flow of oil and traders focused instead on troubling economic data that points to a long and severe global economic slump.
'The market apparently had already priced in this cut,' said Mr Peter McGuire, managing director at investment firm Commodity Warrants Australia, in Sydney. 'I think Opec will have to have another meeting in January, and I wouldn't be surprised to see possibly a three million cut next time.' Opec's next official meeting is scheduled for March. The group had already announced cuts totalling two million barrels earlier this year, also with little effect. The unprecedented production cuts and the market reaction show just how fast energy demand has fallen during the worst economic downturn in at least a generation.
Oil prices have tumbled 73 per cent since July. What started as a crisis in the US sub-prime mortgage sector last year has mushroomed into a recession in most developed countries and a sharp downturn in emerging nations.
Companies across the world are laying off workers and banks are reluctant to lend. Plunging property values and high debt levels have led many consumers to pull back spending.
'I'm worried about growth,' Mr McGuire said. 'You have to get people spending.' Oil prices may fall as low as US$35 a barrel during the next few weeks, he said.
US crude inventories rose slightly last week and gasoline reserves increased as demand stayed below year-ago levels, according to government data released on Wednesday.
Analysts had expected crude stocks to fall by 900,000 barrels, according to a survey by Platts, the energy information arm of McGraw-Hill.
In other Nymex trading, petrol futures were steady at US$1 a gallon. Heating oil was steady at US$1.44 a gallon while natural gas for January delivery fell 2.4 cents to US$5.60 per 1,000 cubic feet. In London, February Brent crude rose 2 cents to US$45.55 a barrel on the ICE Futures exchange. ASSOCIATED PRESS
[email protected]
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