Oil prices fall to their lowest level in a month

08-Feb-05

With a fall of over US$1/barrel in crude oil futures on Monday, oil prices fell to their lowest level in more than a month. Light, sweet crude for March delivery fell to US$45.28 a barrel on the New York Mercantile Exchange, and Brent crude fell to US$43.04 on the International Petroleum Exchange. This is the lowest closing price since January 5, when Nymex oil futures were $43.39. Triggering this fall was signals from OPEC indicating willingness to accept lower prices before cutting output and warmer weather in the U.S. Northeast. During the recent World Economic Forum in Switzerland, several OPEC representatives signaled that OPEC would not cut output unless prices fell to about $37 a barrel. However, OPEC has left open the possibility of an output cut before its mid-March meeting. Also on Monday, two Nigerian oil unions called off a threatened regional strike, dropping demands that the American manager of an oil drilling firm leave the country.The long range trends remained bullish, with rising demand from China and India keeping global supplies tight.