The banking crisis seems to have given way to recessionary concerns, keeping long term outlook negative. Oil prices dropped below US$71 - 13 month lows, as fears of recession fears elevated worries of a long-drawn-out drop in energy demand. New York's main contract, light sweet crude for November dropped to US$75.23, while Brent North Sea crude for November delivery fell to US$70.70 a barrel-the lowest level since late August 2007, before recovering to US$70.93.
The global financial crisis is hitting world demand for oil, although the effect on emerging economies is unclear, as per OPEC. OPEC has cut its estimate of growth in demand for this as well as next year, mainly because of an "excessive" easing of demand in the United States, the single largest energy market. A dip was also affected by news that a Nigerian court had ordered Anglo-Dutch energy giant Royal Dutch Shell to hand over land to locals, a key demand of armed rebels camped in Nigeria's oil-producing region.
United States "appears to be in a recession", Japan and Europe are feared to be heading for a spell of economic stagnation or recession. Markets were meanwhile awaiting the latest weekly snapshot of US energy inventories due Thursday for a lead on the state of demand for oil in the world's biggest consumer of crude.
16-Oct-08 
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