Weak demand sends oil down

New York’s West Texas Intermediate crashed more than $US3 per barrel to $US55.98/bbl on Wednesday after slipping under the $US60/bbl mark on Tuesday.Singapore’s Tapis followed in a more subdued manner, shedding $US1.50/bbl to close at $US58.15/bbl.“Prices continued to fall amid an increasingly deteriorating global economic outlook,” the AFP quoted oil analyst Nimit Khamar as saying.The London-based analyst at the Sucden brokerage added: “The demand situation is deteriorating fairly quickly.”The US Energy Information Administration, whose weekly snapshot of US energy inventories has been delayed to later today due to the Veterans Day holiday on Tuesday, said it expected oil prices to remain in the lower $US60 range next year.“The current US and global economic downturn has led to a decrease in global energy demand and a rapid and substantial reduction in crude oil and other energy prices,” it said in its monthly outlook report.Macquarie Private Wealth client adviser John Wardman said in a note this morning that current data indicated that prices of $80 a barrel are needed to make investment in new supply economic, making it possible that some projects may be cancelled.

Send this to a friend