Oil hits a new low of less than $40 per barrel

Posted by admin on 23 December, 2008 under Business news | Be the First to Comment

The price per barrel of oil has fallen to below $40 and ended the day at $39.73.

Demand for oil is still continuing to fall due to the world economic crisis. I thought again that the price had hit a threshold at around $45 and the idea of $25 per barrel put forward by Merrill Lynch seemed way off, but is looking ever more likely!

This new low price has happened despite output cuts by Opec of some 2.2 million barrels per day earlier this month in order to hold up the price for the Opec members.

With China cutting its interest rates again this week to 5.31% due to economic problems hitting their country, which is leading to lower demand for oil which is putting further downward pressure on the oil price, after such high demand earlier this year which pushed the price up to a record $147 a barrel.