Commodity Daily News

Crude Oil Approaching the $50 Price Level

Oil prices registered a recovery during the day after falling to a 22-month low and getting close to the psychological barrier of $50 a barrel. At midday in the European market, Oil prices dropped below $54 and ending trading at $53.30 due to increasing fears of weakness in the global economy.

However, after reaching its lowest value since January 2007, Crude Oil prices bounced and recovered from earlier losses thanks to a lift in heating oil futures backed by the arrival of cold weather in the Northern Hemisphere. At 17:45 GMT, Oil prices traded at $55.34 on the NY Market, also marking the continuation of the recent downward trend.

Some analysts are pointing at this as the time of the year in which Oil prices touch bottom, while for the moment Oil prices are finding support from heating oil futures, which keep them from a bottomless drop. However, the downtrend continues under the uncertainty of how long and deep this recession will last, Oil prices might continue falling to below the $50 mark. If this level is breached another wave of selling could be unleashed, dragging Oil prices to as low as $40 a barrel.