Crude tumbles $1/bbl on recession worries

20 November 2008 10:59  [Source: ICIS news]

SINGAPORE (ICIS news)--Crude prices fell more than $1/bbl on Thursday as NYMEX Light Sweet Crude Futures (WTI) edged below $52/bbl amid worries over shrinking demand growth as the global economic crisis worsens.

At 10:45 GMT on Thursday, December NYMEX light sweet crude futures were trading at $52.18/bbl, down $1.44/bbl on Wednesday’s settlement level. Earlier it fell to $51.97/bbl, down $1.65/bbl and a new 22-month low.

At the same time, January Brent on London’s ICE futures was trading at $50.63/bbl, down $1.09/bbl on Wednesday’s settlement price. Earlier it fell to a low of $50.30/bbl, down $1.42/bbl, also the lowest level seen since January 2007.

The December NYMEX contract expires at the close of business in New York on Thursday.

Stock markets in Asia and Europe fell sharply on Thursday after Wall Street dropped to a five year low the previous day. Commodity and stock prices slumped as concerns grew that the global economy was interesting a lengthy recession.

Meanwhile, Wednesday’s larger than expected build in US crude inventories added further downside pressure.

US crude inventories for the week ending 14 November were calculated by the Energy Information Administration (EIA) at 315.5m bbl/day. This was up 1.6m bbl/day on the previous week and twice the size of the forecasted increase.

Total product demand in the US was assessed by the EIA some 7% lower than a year ago.

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By: James Dennis
+65 6780 4359

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