SINGAPORE, December 2 – Oil prices fell further below 50 dollars in Asia on Tuesday, touching fresh multi-year lows in a market worried over falling consumption, analysts said.
In afternoon trade New York\’s main contract, light sweet crude for January delivery, dropped 1.64 dollars to 47.64 dollars a barrel on top of a 5.15-dollar fall to 49.28 dollars at the close of trading on Monday at the New York Mercantile Exchange.
The contract hit an intraday low of 47.36 dollars.
Brent North Sea crude for January fell 1.78 dollars to 46.19 dollars, off an intraday low of 46.03. The contract plunged 5.52 dollars to settle at 47.97 dollars Monday in London.
"I think it\’s the same-old, same-old: consumption softening," said David Moore, a commodities strategist with the Commonwealth Bank of Australia in Sydney.
"The data out of the US and other countries support the view that consumption has softened."
Prices have fallen heavily from record highs above 147 dollars reached in July on worries over slowing economic growth and its impact on demand for energy, analysts said.
A panel of economists charged with the official designation of business cycles said Monday that a US recession began one year ago, but Moore said the finding was no surprise.
The Eurozone, Japan and other economies are already in recession.
The Organisation of the Petroleum Exporting Countries (OPEC) decided at a weekend meeting against cutting production.
OPEC is scheduled to gather again in Algeria on December 17. The cartel\’s secretary general, Abdalla Salem El-Badri, said on Monday the group would decide on a major output cut if the oil market is deemed to be deteriorating.
"We can\’t say how much the output cut will be in December but for sure there will be an action because we\’re seeing that stocks are high," Badri said. "I cannot tell you (the size of the cut) but it will be a good amount."
He described a price of 75 dollars a barrel as reasonable but added, "our outlook is for between 70 to 90 dollars per barrel."
OPEC, which pumps about 40 percent of the world\’s oil, already agreed to production cuts in September and October but they failed to halt the slide in prices.