As USA forays into a corporate earnings season expected to be fraught with bad news, oil demand has dipped, driving oil prices to a new low for the year. Light, sweet crude for February delivery dipped by over two dollars to US$38.12 a barrel on the New York Mercantile Exchange. In London, February Brent crude dipped to US$43.47 a barrel on the ICE Futures exchange.
The US corporate earnings season is expected to be weighed down with bad news, dampening economies worldwide, and overshadowing factors that generally boost the market : tensions in the Middle East, OPEC's implementation of large-scale production cuts, the ongoing Gazprom-Ukraine gas dispute and expected coldest weather in a decade this winter. The Department of Energy's last weeks report indicated a deterioration in demand apparent on larger than expected inventories of oil, natural gas and gasoline. According to the US Labor Department employers slashed 524,000 jobs in December and 2.6 mln jobs through the year 2008. The nation's unemployment rate jumped to 7.2%, the highest since 1993.
Traders are buying crude and storing it, some in oil tankers leased at sea, in anticipation of better price realization at a later date.
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