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article imageOil drops below $40 per barrel

By Adriana Stuijt     Jan 12, 2009 in Business
The price of crude oil dropped by a full American dollar on Monday to $ 39,73 per barrel (159 litres) on the Rotterdam spot market. The drop was caused by the negative reports about the American labour market.
The oil-traders in Europe say there are growing concerns that due to the United States' labour market problems; there will also be a lowered demand on oil, writes the Dutch Financial Daily today. The oil-traders are not nearly as concerned about the Gaza-conflict or the row between the Russian Federation and the Ukraine about the natural-gas price, as they are about the continuous stream of negative news published every day from the US labour market, where the recession is causing daily mass-layoffs with no apparent end in sight, with companies collapsing like dominoes.
This proves it once again: whenever the United States economy hiccups, the entire world goes into spastic fits. See the latest reports here
Traders here also expect increased pressure to get the oil price down even more as long as the economic malaise continues. If America can't get back to work enmasse, and soon, the oil price can be expected to go down even more, in other words.
Saudi Arabia has also just announced that it will reduce its oil production even more than the agreed-to production levels inside the oil-producing economic countries' OPEC-cartel - to avoid a glut on the market.
A lower oil price however, might also boost the economic process because companies will be able to produce more with less fuel -- so this is turning into a real chicken-and-egg situation.
More about Oil, Rotterdam spot market, Gas
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