A barrel of light, sweet crude for December delivery dipped to US$63.25 on the New York Mercantile Exchange. As recession in USA seems imminent and demand from China fails to lift, oil prices have dipped after spiking past US$69 in Asian trade on Monday. Lifted oil prices failed to sustain on a report by US manufacturers of lethargic activity numbers for October. The Institute for Supply Management said its manufacturing index fell to 38.9, the worst reading in more than 25 yeras. Any reading below 50 signals contraction. Also, Credit Suisse has reduced to 0- its forecast for growth in China's oil demand in 2009 from 4%. This, along with other data indicates that a much more severe economic slowdown is under way there.
It appears that OPEC's recent output cut could achieve "fairly good level" of compliance from member nations, creating a floor for the oil price. However, a second output cut at the cartel's December meeting seems doubtful as well as difficult to implement.
04-Nov-08 
{{comment.DateTimeStampDisplay}}
{{comment.Comments}}