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Oil dips below $75 as OPEC cuts demand forecast
(Agencies)
Updated: 2008-10-16 10:30 NEW YORK -- Oil prices closed below $75 a barrel for the first time in nearly 14 months Wednesday after OPEC, fearing that a severe global economic slowdown is unavoidable, slashed its 2009 petroleum demand forecast.
Another bad day on Wall Street also pressured oil prices, which have tumbled a staggering 49 percent since soaring to an all-time high $147.27 on July 11. The Dow Jones industrial average plunged 733 points. Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Illinois, said oil traders using the stock market as a barometer for economic health were "undoubtedly" pricing a recession into the market. "It's just a question of severity," Ritterbusch said. "And given the downward movement in oil, it's beginning to look like a more severe recession than a lot of people had expected." Light, sweet crude for November delivery fell $4.09, or 5.2 percent, to settle at $74.54 a barrel on the New York Mercantile Exchange. It was crude's lowest settlement prices since August 31, 2007. In London, November Brent crude fell $3.73 to settle at $70.80 a barrel on the ICE Futures exchange. The Organization of Petroleum Exporting Countries said rich nations in 2009 are expected to need only 400,000 barrels a day more oil than this year, whereas demand from developing countries will increase by an estimated 1.1 million barrels, with most of that growth coming from China, the Middle East and India. OPEC's report comes about a month before the cartel is scheduled to hold a special meeting to discuss ways to deal with oil's slide, including the possibility of tightening output. OPEC controls 40 percent of the world's oil supply, though analysts say a cutback in OPEC production likely would not dramatically alter crude's downward direction. |
