Global economic gloom drags Oil below $53

Global economic gloom drags Oil below $53

Singapore: Oil prices fell below $53 to almost a two-year low on Thursday in Asia as investors, egged on by plummeting stock markets, priced in lower crude demand from a global economic downturn that’s shaping up as the worst in decades.

Light, sweet crude for December delivery was down 81 cents to $52.81 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract Wednesday fell 77 cents to settle at $53.62, the lowest since January 2007.

Concerns that Congress may not approve a $25 billion rescue package for ailing US carmakers General Motors Corp., Ford Motor Co., and Chrysler LLC helped drag the Dow Jones industrial average down 5.1% Wednesday to its lowest level since March 2003.

Asian stocks opened down Thursday with Japan’s benchmark Nikkei index falling 4.7%, Hong Kong’s Hang Seng index off 5.1% and the Korea Composite Stock Price Index sliding 5.4%.

On Wednesday, the US Department of Transportation provided more evidence that the slowdown continues to hurt gasoline consumption, even as prices fall. Americans drove almost 11 billion fewer miles in September, the department said.

A production cut by Opec may keep prices from falling further. The Organization of Petroleum Exporting Countries is holding an informal meeting later this month ahead of an official meeting in December. Opec President Chakib Khelil has signaled the group may announce production cuts at the December meeting, but some members, such as Iran, have called for earlier cuts.

Investors have been brushing off news that earlier in the year would have sent prices higher. Chevron Corp. invoked “force majeure" Tuesday on 90,000 barrels a day of Nigerian production after a pipeline was breached by militants in the Niger Delta. Earlier this week, Somali pirates hijacked a Saudi supertanker carrying $100 million in crude.