Crude oil down to $44.27 per barrel

Posted by admin on 5 December, 2008 under Business news | Be the First to Comment

The price of crude oil has continued its downward spiral and has now hit a low that was last seen in early 2005.

It will be interesting to see where the bottom is on the oil price and I will admit that I thought this had been reached at the $50-55 price. However, Merrill Lynch has reported that the price could fall as low as $25 per barrel if the global recession extends to China. Demand for oil has fallen dramatically with most of the major economies falling into recession including the US, the UK, Japan and the Eurozone.

The leaders of all major world economies are trying to stimulate growth and are trying to put confidence back into the system and in particular the banking system. With the UK’s Bank of England drop in interest rates to 2% on Thursday of this week and the US Treasury dropping their bank rate to 1% and the Eurozone to 2.5%.

Again, I call for small businesses to report how they are doing and what trades are being most affected by this down-turn. We see the headlines in the news about household named businesses such as Woolworths and MFI both going into receivership, but it is the small businesses that make up the majority of the world economies and it would be good to get feedback on where things stand.