As the recession in USA, Europe and Japan deepens and slashes fuel consumption worldwide, crude oil prices continue to journey south. Fresh reports of weak US economic data have revitalized concerns of slowing global energy demand, tanking oil prices to hover around US$45 a barrel - their lowest point since February 2005. Brent North Sea crude for delivery in January fell to US$44.8, while light sweet crude for January fell to US$46.2 on the New York Mercantile Exchange.
A new report indicates that the US private sector lost 250,000 jobs in November - the largest decline in six years, strengthening concerns about a darkening outlook in the recession-hit US economy. As the macroeconomic backdrop to the oil market continues to worsen projections have been revised - global crude oil demand is being projected to decline in 2008 and 2009. The US government's Department of Energy has reported a fall in crude inventories by 400,000 barrels in the week ending November 28, contrary to market expectations of 1.4 mln barrel increase, and a fall in gasoline stockpiles of 1.6 mln barrels, as against estimates for a gain of 1.6 mln barrels.
The oil market began the week lower, after OPEC decided against cutting production, preferring to wait until December before reducing exports. This decision has been deferred until the next meet in Algeria on December 17.