Crude Falls Below $40
Dec 23rd, 2008 | By Doug Casey | Category: Financial NewsIn energy news Monday, oil prices continued their decline. Crude for February delivery dropped $2.45 to $39.91 a barrel, while January reformulated gasoline lost 8.6% to finish at $0.89 a gallon.
Oil’s decline came amid more reports of decreasing demand for crude. China’s General Administration of Customs announced Monday that November crude imports to the world’s second-largest consumer of oil had dropped 1.9% from a year ago. The Japanese Ministry of Finance likewise released numbers showing that November crude imports had declined by 17% since last year.
These figures outweighed news that OPEC might institute further cuts in production. According to the Associated Press, OPEC president Chakib Khelil announced that he was willing to cut production “as much as was necessary to stabilize oil prices.” This announcement comes just a week after OPEC announced a cut of 2.2 million barrels a day.
The extent to which oil prices could continue to drop “depends in large part on OPEC’s efforts to rein back output,” wrote Edward Meir of MF Global (NYSE:MF). “Should the cartel get its act together, we could be close to bottoming out by the end of January.
“In the meantime,” he stated, “prices could remain under further pressure.”
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