Brent oil, the benchmark that prices two-thirds of the world’s crude, fell below $50 a barrel for the first time since May 2005 as global energy demand slumped.
Brent has crashed 66 per cent from a record $147.50 a barrel on July 11th as the credit crisis spread through the global economy, cutting industrial output and consumer spending.
The International Energy Agency expects world oil demand to rise at its slowest pace for 23 years in 2008 as the US, Europe and Japan face their first simultaneous recessions since 1945.
Brent for January settlement fell as much as 3.7 per cent to $49.80, the lowest since May 31st, 2005, today on London's ICE Futures Europe Exchange. The contract traded at $49.85 at 1.26pm.
Oil's decline has accelerated. Crude fell 33 per cent in October, the most in one month since at least 1988, as fuel demand dropped. US fuel use during the past four weeks averaged 19.1 million barrels a day, down 7 per cent from a year ago, an Energy Department report said yesterday.
US crude oil supplies rose 1.6 million barrels to 313.5 million barrels last week, the Energy Department said yesterday. Stockpiles were forecast to rise 1 million barrels, according to a Bloomberg News survey of analysts.
Brent first rose above $50 on October 11th, 2004 in the middle of oil's six-year rally toward this year's records. Prices climbed on the strength of oil import demand from emerging economies, led by China, the world's second-largest oil consumer, after the US
The IEA lowered its 2009 estimate by 670,000 barrels a day, or 0.8 per cent, to 86.5 million barrels a day following weaker economic forecasts from the International Monetary Fund, it said in a monthly report last week. That's the biggest reduction since 1996.
Bloomberg