Oil plumbs new depths

21/11/2008

Crude oil prices closed at less than $50 (£33) a barrel yesterday, its lowest level since May 2005.

On the New York Mercantile Exchange, light, sweet crude for December delivery shed more than seven per cent during the day's trading, finishing at $49.62 a barrel.

Meanwhile, London Brent crude, the UK's main contract, fell to $48.08 a barrel, also the lowest price witnessed since May 2005.

Such falls may soon impact on the price of domestic heating oil, DERV, red diesel and bunker fuel.

Indeed, Chris Jarvis, senior analyst for Caprock Risk Management, told Reuters that prices are likely to continue to plumb new depths.

"Further weakness can be expected for crude oil, if global markets continue to march on their deep spiral south," he said.

However, during trading this morning, there are indications that the commodity is making a recovery.

US light sweet crude has risen above the $50 a barrel, with Bloomberg reporting that the rise comes amid speculation that a new round of governmental fiscal stimulus packages are to be announced.