Oil sinks to historic $34

December 19, 2008
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, LONDON, Dec 19 – The price of New York oil sank under 34 dollars per barrel on Friday for the first time for more than four and a half years, as weak global demand overshadowed a record OPEC output cut, traders said.

New York\’s light sweet crude for delivery in January sank as low as 33.44 dollars a barrel, which was the lowest point since April 2, 2004.

The January contract, which was also driven lower in technical trading owing to its expiry on Friday, later stood at 33.61, down 2.61 dollars from the close on Thursday.

New York prices have now plunged by about 77 percent since striking a record high of 147.27 dollars in July on supply concerns in key producer countries.

Meanwhile on Friday, London\’s Brent North Sea oil for February delivery edged up four cents to 43.40 dollars a barrel, after dipping as low as 43.21.

"The global recession continues to sap demand," said BetOnMarkets analyst David Evans.

"Even after OPEC cut production by more then two million barrels, oil prices have fallen below the 40 dollar per barrel level.

"Prices are likely to stabilise between the 35 and 40 dollar levels."

The Organisation of the Petroleum Exporting Countries (OPEC), which produces about 40 percent of the world\’s crude, agreed on Wednesday to cut output by 2.2 million barrels a day.

But the move failed to prevent oil diving to multi-year low points as traders also questioned whether all members of the 13-nation OPEC cartel would fully enforce the reduction.

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