Oil prices tumble to 20 month lows

13-Nov-08

Concerns of deteriorating energy demand amid a financial crisis has pulled down oil prices to 20 month lows. New York's light sweet crude settled at US$56.1, while in London, Brent North Sea crude fell to US$52.37 a barrel. Oil prices dropped to intraday lows of 55.83 dollars in New York and 52.05 dollars in London, their lowest levels since March and January 2007, respectively. The US Energy Information Administration predicted oil prices would remain somewhat steady in the lower 60 dollar range next year, saying levels will primarily depend on the magnitude and duration of the economic downturn as well as OPEC and non-OPEC behavior. It is estimated that an OPEC production cut would limit, but not reverse, the recent sharp fall in oil prices. The condition of the global economy is expected to remain the most important factor driving world oil prices. OPEC is scheduled to meet in Oran, Algeria, on December 17.