Time is GMT + 8 hours Posted: 20-Nov-2008 22:46 hrs
An oil refinery. Oil prices tumbled under 50 dollars a barrel in London and New York as the crude market was plagued by weak energy demand
Oil prices tumbled under 50 dollars a barrel in London and New York on Thursday as the crude market was plagued by weak energy demand, traders said.
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In New York, light sweet crude for delivery in December dived to 49.91 dollars a barrel -- the lowest level since January 18, 2007.
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Brent North Sea crude for delivery in January tumbled to 48.20 dollars a barrel -- last reached on May 24, 2005. The contract had closed on Wednesday at 51.72 dollars.
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Prices went on to recover slightly, with New York oil at 50.98 dollars and Brent at 49.27 dollars.
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Crude oil prices have plunged almost two-thirds since striking record highs above 147 dollars in July as a global economic slowdown dents world energy demand.
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"The recent fall in prices largely reflects concern that OPEC is unwilling to make the oil output adjustments necessary to compensate for weakening oil demand," said Dresdner Kleinwort analyst Gareth Lewis-Davies.
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On Monday, the Organization of the Petroleum Exporting Countries (OPEC), whose members produce 40 percent of the world's oil, said it was ready to intervene on a regular basis to help prop up prices.
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But analysts doubt whether OPEC was even fully carrying out a promise to reduce production by 1.5 million barrels of oil per day from November 1.
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The latest weekly US Department of Energy (DoE) report on energy stockpiles had Wednesday showed a sharp drop in fuel demand across the United States, the world's biggest oil consuming nation.
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Crude futures are likely to drop further to 43 or 44 dollars a barrel before rebounding along with the global economy next year, CFC Seymour Securities said in a report published on Wednesday.
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The London-based Centre for Global Energy Studies (CGES) on Tuesday forecast a contraction in global demand for the first time in 25 years amid a severe global economic slowdown.
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Meanwhile on Thursday, traders shrugged off news that US oil group Chevron had suspended export contracts on much of its Nigerian production after a militant attack on a key pipeline.
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Chevron said it was declaring "force majeure" until December 31 following the attack last Friday on the pipeline which carries supplies to its Escravos terminal in the Niger Delta.
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The measure exempts a party from liability for failing to meet commitments due to circumstances beyond its control.
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A company spokesman in Lagos on Thursday said that about 90,000 barrels of oil a day had been affected.
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Militant attacks on oil pipelines, other facilities and workers since January 2006 have slashed Nigeria's daily production from about 2.6 million barrels to about two million now. — AFP
