The price of Nymex crude has fallen to below $50 per barrel today finishing at $49.62.

Opec is considering cutting production by another 1.5 million barrels a day in order to prop up the price. But with the stocks of oil in the US piling up and increasing by more than expected the dollar price of oil is not looking to go up for some time.

With world economies shrinking and many reporting to be in recession the demand for fuel is reducing and therefore putting further downward pressure on the price of oil. Also, with China facing possible unrest, as unemployment increases due to weak demand for their products due to the world slowdown, where no so long ago China was one of the driving forces behind the oil price rise.

There are more concerns over a number of world economies falling into recession, with the lastest being the US probably already in recession and Germany on the brink.

Inflation seems to be falling with world food prices dropping and the price of oil per barrel easing further this week to end at $71.75. Raw material prices, like steel, have also seen a drop as Tata cuts output at Corus this week due to weaker demand. And in the US it has seen the biggest fall in 34 years in its industrial production!

More woes for the travel industry with the Spanish airline LTE International suspending its operations this week after getting into serious financial difficulty.

The slowdown in the UK has affected retails store MFI, which is under the supervision of administrators Kroll after management took over the operations of the majority of the stores. The firm is trying to sell on the failing stores in MFI, but these will be closed if there is no buyer.

Northern Rock, is top of the “Repossession list” this week where it has seized 4,021 homes by the end of September, which has angered charities – with Shelter adding that “Shelter said repossessions should only occur if “absolute necessary” and that people should be given every assistance, including free independent advice, to help them stay in their homes. “

Good news on the petrol prices front with the price per litre falling below £1 this week when suppermarket chains Morrisons and Asda along with oil giant BP led the way when the price per litre was reduced to 99.9p.

If the oil price per barrel stays where it is, then petrol prices at the pump must come down still further – it only makes sense with the price per barrel dropping from a high of $147 to $71.75, a drop of more than 50%. So come on oil companies do your bit for the world economies, pass on the price reductions.

We also see an interesting contrast between the cola producing giants with Coca-Cola benefiting from strong demand in emerging markets, reporting a 14.5% rise in profits for the first quarter over last year. Whereas, Pepsi is cutting 3,300 jobs as their profits slide where the company saw third-quarter pre-tax profits fall 9.5% to $1.6 billion.

The world financial markets continued this week to be in turmoil with huge falls on the stock markets follwed by large increases too. The Dow Jones fell by 733 points overnight from a rally to 9,311 earlier in the week to close at 8,852 at the end of the week, which is up on the close from last week by 4.74%. The UK’s FTSE 100 saw similar volatility seeing large fluctuations in the week and ending up 3.3%.

End of the week saw:
Stock exchanges:
FTSE 100: 4,063
DOW: 8,852
S&P: 941
Nikkei: 8,694

Currencies
UK Sterling £ to US Dollar $ 1.73055
UK Sterling £ to Euro € 1.28542
UK Sterling £ to Aus $ 2.51025
US Dollar $ to Euro € 0.74278

Commodities
Crude oil – $71.75
Gold – 785.30

US industrial production has seen its sharpest fall in 34 years in September 2008.

The output from US factories, utilities and its mines has fallen by 2.8% last month, this fall was made wost with a slow down due to the recent hurricanes, Gustav and Ike. There are now concerns that the US may already have entered a recession with the UK expected to go into recession by December and problems on continental Europe too.

There is good news where consumer prices have remained flat in the same month, which is a sign that inflation is beginning to ease and might lead to further cuts in interest rates to follow on from the recent round of cuts made by world governments.

There are also signs that world’s food price rises are slowing down and in some cases are falling, including meat and fish and fruit and fresh vegetables. This too will help to lowering inflation pressures and also, at a difficult time for consumers, ease the burden on household bills.

Problems in China

China is also being hit by the slow down and another Chinese toy manufactuer Smart Union has gone out of business with a loss of close to 7,000 jobs. The company, which supplies US business Mattel, has not paid wages to it’s employees which has angered the work force leading to protests and the police getting involved. So far in 2008 more than 50% of China’s toy exporters have gone out of business as a result of rising raw materials and labour costs.