Where is the bottom of the oil price?

Posted by admin on 17 December, 2008 under Business news | Read the First Comment

The price of oil fell to below $40 this week and closed the day at $40.32 representing another low of this year and down to levels seen back in 2004.

Opec have been cutting production to help maintain the barrel price and has again agreed to cut this again by a record 2.2 million barrels per day. However, despite these cuts and to-date this is 4.2 million barrels per pay, the price of oil has continued its fall, as inventories of oil build up in America and other major oil consumers around the globe.

Merrill Lynch predicted that, should China go into recession, the price could fall to around $25 per barrel, which I must admit seems so low, but then I though that price had bottomed out at around $55 per barrel and then at just over $40. So it is any ones guess where the bottom might be to this fall in oil prices at a time where consumer confidence in world economies is at an all time low.