labels: Economy - general, World economy
Oil plunges to levels around $42 a barrel news
05 December 2008

Crude oil prices plunged to 4-year lows around $42 a barrel as US unemployment claims hit a 26-year high and major auto makers around the world announced production cuts amidst a global economic slow-down.

Light, sweet crude for January delivery on the New York Mercantile Exchange hit a low of 42.01 a barrel - the lowest crude futures have traded since 4 January 2005 - and was trading at $1.26, or 2.9 per cent at $42.41 a barrel in early trading.

North Sea Brent crude on London's InterContinental Exchange (ICE), recovered some of the early losses and was trading at $42.96 a barrel, up 68 cents from Thursday's close.

Oil prices were hammered by news that the November non-farm payrolls and unemployment report was expected to show the loss of 325,000 jobs in the US, the world's biggest oil consumer.

Crude prices have fallen by more than two thirds since mid-July when prices rose to a record $147 a barrel.

The Organisation of Petroleum Exporting Countries (OPEC), which deferred a decision on production cuts at its last meeting, is expected to announce measures to boost prices when they meet next week.

OPEC, which supplies around 40 per cent of the world's crude, is likely to set a $60 a barrel floor for oil. OPEC president Chakib Khelil has told Algerian television that the group will cut much of its production if oil stays at levels below $60.


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Oil plunges to levels around $42 a barrel