Oil slips below $44, lowest in 4 years

Oil slips below $44, lowest in 4 years

Singapore: Oil was steady below $44 on Friday, at its lowest in almost four years, with eyes turning to the psychologically important $40 level as a widening economic slowdown gnaws into oil demand.

Prices have lost nearly 20%, or almost $11, from their settlement a week ago following the release of weak US economic indicators, with lower retail sales and a 26-year high in jobless benefits rolls the latest to add pressure to prices.

US light crude for January delivery fell 4 cents to $43.63 a barrel, having lost more than 6% on Thursday to settle at $43.67, the lowest since 5 January, 2005.

London Brent crude dipped 8 cents to $42.20.

The number of US workers collecting jobless benefits hit a 26-year high last month, data showed on Thursday, and may head higher as a growing economic slump forces a broad range of firms to cut jobs.

US and European companies announced further job cuts, with US phone company AT&T Inc saying it would eliminate 12,000 jobs, while chemical maker DuPont Co planned to drop 2,500.

Leading US retailers also reported dismal November sales on Thursday. Totting up the results, the International Council of Shopping Centers said sales fell by a record 2.7% compared to the same period last year.

To try and ginger up their feeble economies, European central banks cut interest rates on Thursday.

Sweden’s central bank cut by a record 175 basis points, the European Central Bank cut by 75 points and the Bank of England cut by 100 points.

The price fall to nearly four-year lows has prompted Opec members to call for increasingly strong action when the Organization of the Petroleum Exporting Countries meets next, on 17 December in Algeria.

But analysts say another Opec cut, the third since September, would need to be drastic to provoke a price reaction.