Commodity Daily News

Oil Slips 5% as Economic Glooms Continues

Crude Oil prices declined more than 5% on Thursday as thickening economic gloom added to worries that world energy demand will continue falling this year. Crude fell $1.88 to settle at $35.40 a barrel, after falling as low as $33.20, its lowest price since December 19. The losses came after U.S. economic data showing that the number of U.S. workers filing new claims for unemployment benefits rose last week. Additionally, U.S. foreclosure activity jumped 81% in 2008, suggesting the recession in the world's largest energy consumer nation is deepening.

The deteriorating global economic outlook has prompted the Organization of the Petroleum Exporting Countries (OPEC) on Thursday to forecast a fall of 180,000 barrels per day in world Oil demand this year. This is 30,000 barrels steeper than its previous forecast. The cartel has already cut 4.2 million barrels from the world market since September. OPEC's President Botelho de Vasconcelos stated on Thursday that production may be cut further in the coming months if needed.