Oil 'will continue to slide in 2009'

16/12/2008

Oil prices will continue to trade at subdued levels through next year amid declining demand, Deutsche Bank analyst Michael Lewis has claimed.

Speaking to Agence France-Presse, the commodities expert warned that the collapse in oil prices - which also led to falls in heating oil, DERV and other distillates - could contribute to a sustained period of deflation.

"Heading into 2009, we believe many commodity prices are set to overshoot to the downside in response to the worst downturn in economic activity since the Great Depression," he said.

Meanwhile, Peter Beutel, analyst at energy consultancy Cameron Hanover, said that 2008 will be remembered as one of the most volatile years ever witnessed in terms of oil price fluctuations.

Crude hit a record $147 a barrel in London and New York in mid-July, a spike which in turn caused substantial rises in the price of heating oil.

On the New York Mercantile Exchange, heating oil traded above $4 a gallon in July, before receding steadily in the following months.