COLUMBUS, Ohio: Oil continued its downward march yesterday as mass layoffs pushed the US economy deeper into recession, signaling a drastic pullback on energy spending.
Light, sweet crude for February delivery, fell $1.07 to $43.54 barrel on the New York Mercantile Exchange. The January contract, which closed yesterday, fell $1.42 to $38.64 after dropping as low as $37.68, levels last seen in the summer of 2004.
There is no demand for oil right now, said analyst Peter Beutel of Cameron Hanover.
Higher prices for the February contract suggest that oil brokers and traders believe OPEC’s unprecedented 2.2 million-barrel daily production cut, announced Wednesday, will tighten supply. The Organization of Petroleum Exporting Countries had already taken 2 million barrels of oil out of production, bringing total cuts to more than 4 million barrels a day.
“The market is saying OPEC cuts will have an impact but just not right away,” he said.
