Oil falls below $50 again

24/11/2008

Crude oil prices have dipped below $50 (£33) a barrel during trading today (November 24th) as demand continues to tail off.

Bloomberg reports that the declines come amid speculation that the Organisation of the Petroleum Exporting Countries (Opec) will not limit supply at their upcoming monthly meeting.

During early trading on the New York Mercantile Exchange, crude for January fell as much $1.13, reaching $48.80 a barrel.

Falling oil prices may soon be reflected in drops in domestic heating oil costs, in addition to other derivatives such as DERV and bunker fuel.

Meanwhile, Rob Laughlin, senior broker at MF Global, warned that Opec may not be able to prevent prices from falling further.

"The concern is that OPEC will not deliver a cut of the magnitude needed to offset the slump in global demand, which shows no sign of improving," he said.

At an emergency meeting held in Vienna last month, the group agreed to cut production by some 1.5 million barrels of oil a day.