Oil prices slip below US$59 a barrel

08-Nov-06

Light sweet crude for December delivery dipped by over one dollar to settle at US$58.93 a barrel on the New York Mercantile Exchange and December Brent crude on London's ICE futures exchange slipped by US$1.27 to settle at US$58.48 a barrel. This slide is in anticipation in the markets as they await the weekly snapshot of U.S. supplies - likely to show modest increases in crude and gasoline inventories. Prices slipped a day ago amid threats of violence in Nigeria and a suggestion that OPEC needs to further cut its output. The long-term outlook for oil prices appear bullish, with the International Energy Agency saying that governments around the globe must substantially increase their investment in the infrastructure that carries energy supplies to prevent a global shortage by 2030. In its 2006 World Energy Outlook, the IEA reports that global energy needs will surge 53% by 2030, over 70% of which is expected from developing countries, led by China and India.