October 16, 2008
Oil has followed movements in equity markets this month and with share prices in London down 3pc just before lunch, the price of a barrel slid more than $3 to $67.62.
- A d v e r t i s e m e n t
Tightening credit has eroded demand and pushed prices down 18pc from a year ago, and 51pc from the record $147.27 a barrel reached on July 11.
The Organization of Petroleum Exporting Countries yesterday cut its forecast for demand next year by 450,000 barrels a day, or 0.5 pc, to 87.2m barrels a day because of “dramatically worsening” financial market conditions.
“Demand not just for energy but across all consumer products is going to be hit,” said Jonathan Kornafel, a director for Asia at Hudson Capital Energy in Singapore.
“That’s just going to export recession to Asia and the manufacturing economies. Next year is not going to be pretty.”
Federal Reserve chairman Ben Bernanke said yesterday that efforts to calm financial markets will probably not result in an immediate economic rebound.