Oil price falls back sharply

Posted by Oilism.com on November 12th, 2008 at 05:55pm

NEW YORK – Oil prices fell Wednesday to its lowest level in 22 months time. That was caused by speculation about a reduction in demand due to the deteriorating economic conditions.

A barrel of U.S. crude oil (159 liters) fell by 5.8 percent to 55.86 dollars.

The U.S. government gave an extra boost to speculations by downwards adjusting the forecast for global oil demand for 2009.

Oil Consumption
The U.S. Energy Information Agency (EIA) expects that consumption will decline slightly next year to an average 85.9 million barrels per day.

The demand in the United States, the largest buyer of crude oil in the world, will decrease with more than 1 million barrels per day. That is since 1980 not seen on the world wide oil markets.

OPEC
The Organization of Petroleum Exporting Countries (OPEC) told earlier this week oil productions will further decrease as the oil price continues to fall.

Last week, OPEC reduced production already with 1.5 million barrels per day, but the price of crude oil barely reacted to this production cut.

Last July, oil prices reached another record high of 147 dollars per barrel. Then the price plummet quickly followed by an OPEC production cut not long after that .

Under OPEC+ Oil Price 2008+ Oil Price 2009+ Oil price+ Production levels+ energy prices