Crude tumbled below $37 a barrel Thursday to their lowest level in at least four years, underscoring the market's preoccupation with a sharp slowdown in oil demand. Year to date, oil prices have fallen 59% and are 75% since their record level above $147 a barrel in July.
Oil for January delivery fell $3.84, or 9.6%, to end at $36.22 a barrel on the New York Mercantile Exchange. Earlier, the contract hit an intraday low of $35.98 a barrel on Globex. The January contract will expire at the end of trading on Friday. The February crude contract, which showed greater trading volume, fell $2.94 to end at $41.67 a barrel on Nymex.
"Below $38, we don't see anything until the $25 level," said Edward Meir, an analyst at MF Global. OPEC agreed Wednesday to cut 4.2 million barrels a day from its actual September production level of 29.045 million barrels a day.
OPEC can cut supply as much as they want — but as long as demand drops even more sharply, prices are unlikely to rise. And demand for oil has crumbled amid the global economic downturn.
This action might be triggered by Margin Calls, even it is very oversold, but since it breaks the $40 support, there is no support level until $25. How long will oil stay low? Until the economy starts to recover and global demand starts to increase again. Will the dollar movement have anything to do with oil price?
This action might be triggered by Margin Calls, even it is very oversold, but since it breaks the $40 support, there is no support level until $25. How long will oil stay low? Until the economy starts to recover and global demand starts to increase again. Will the dollar movement have anything to do with oil price?
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