COLUMBUS (OHIO): Oil prices fell below $40 a barrel on Saturday for the first time this year as the US government reported the worst annual job losses since World War II.
People are travelling less, manufacturers are slashing production and there are job cuts across almost every sector of the economy, leading to a severe drop-off in energy use.
The Labor Department said employers slashed 524,000 jobs in December and 2.6 million jobs for all of 2008. It was the worst annual loss since 2.8 million jobs were loss in 1945, although the number of jobs has more than tripled since then. The US unemployment rate jumped to 7.2 per cent, the highest since 1993.
Light, sweet crude for February delivery fell $1.72, more than 4%, to $39.98 on the New York Mercantile Exchange.
Saturday's decline capped another bad week for oil prices, though crude at one point rose above $50 a barrel from a five-year low of $33.87 on Dec 19.
Crude has closed lower every day with dire economic news overshadowing armed conflict in the oil-rich Middle East, a dispute that has shut off or disrupted natural gas supplies to more than a dozen European nations, and diminished crude exports from the Organization of Petroleum Exporting Countries, which accounts for about 40 per cent of global supply.
The unemployment report bolsters how the worst recession in decades has taken hold of the US economy. At the same time, crude oil continues to flood the market with traders storing oil at sea in hopes that it can be sold later should prices rise.
Source: http://timesofindia.indiatimes.com/Business/Oil_prices_fall_below_40/articleshow/3959303.cms
People are travelling less, manufacturers are slashing production and there are job cuts across almost every sector of the economy, leading to a severe drop-off in energy use.
The Labor Department said employers slashed 524,000 jobs in December and 2.6 million jobs for all of 2008. It was the worst annual loss since 2.8 million jobs were loss in 1945, although the number of jobs has more than tripled since then. The US unemployment rate jumped to 7.2 per cent, the highest since 1993.
Light, sweet crude for February delivery fell $1.72, more than 4%, to $39.98 on the New York Mercantile Exchange.
Saturday's decline capped another bad week for oil prices, though crude at one point rose above $50 a barrel from a five-year low of $33.87 on Dec 19.
Crude has closed lower every day with dire economic news overshadowing armed conflict in the oil-rich Middle East, a dispute that has shut off or disrupted natural gas supplies to more than a dozen European nations, and diminished crude exports from the Organization of Petroleum Exporting Countries, which accounts for about 40 per cent of global supply.
The unemployment report bolsters how the worst recession in decades has taken hold of the US economy. At the same time, crude oil continues to flood the market with traders storing oil at sea in hopes that it can be sold later should prices rise.
Source: http://timesofindia.indiatimes.com/Business/Oil_prices_fall_below_40/articleshow/3959303.cms
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