LONDON: World oil prices fell yesterday below $40 a barrel in thin pre-Christmas trade, as traders eyed weak energy demand arising from a global economic downturn.
Light sweet crude for delivery in February delivery shed $1.58 to $38.33 a barrel on the New York Mercantile Exchange (NYMEX). The price of Brent North Sea crude for February sank $1.75 to $39.70 per barrel on London’s InterContinental Exchange (ICE).
Both contracts had fallen by about $2.5 on Monday as the market was also plagued by weakening world demand for energy. The Organization of the Petroleum Exporting Countries (OPEC), which produces about 40 percent of the world’s crude, agreed last week to cut output by 2.2 million barrels per day in a bid to shore up prices.
After a rollercoaster year, oil prices have now tumbled by about 57 percent since the start of 2008 — when they traded at about $95 per barrel.
Meanwhile, the euro gained slightly against the dollar yesterday in muted trading ahead of the Christmas break, with dealers largely shrugging off US data confirming negative economic growth in the third quarter.
In late afternoon trading the euro was changing hands for 1.3959 dollars compared to 1.3944 in New York late on Monday. The euro also gained against the yen, rising to 126.10 yen compared to 125.79 yen on Monday.
The dollar rose against the yen to 90.57 yen, up from 90.25 on Monday.
Currency markets were closed yesterday in Tokyo and will be working half-days in Europe and the United States today. Markets will be closed everywhere on Thursday and closed again in London on Friday.
