Crude oil tumbled more than 9 percent Thursday as OPEC's record output cut failed to ease growing demand concerns brought by deepening economic recession.
Light, sweet crude for January delivery shed 3.84 U.S. dollars to settle at 36.22 dollars a barrel on the New York Mercantile Exchange. Price dropped to 35.98 dollars a barrel, the lowest level last seen in June 2004.
OPEC announced on Wednesday an output cut of 2.2 million barrels per day starting January 1, 2009, in a bid to stable the plunging oil prices. But the market seems to shrug off the oil cartel's record supply cut as to many dealers the amount is inadequate to turn the bearish sentiment around, and the market is also skeptical about the compliance of OPEC on production cut.
Government data released on Thursday suggested that the U.S. labor market and manufacturing sector still remain weak, adding to the worries over the economic downturn.
Energy demand continued to drop. U.S. Energy Department revealed that in the past four weeks, U.S. fuel demand averaged 19.6 million barrels a day, 4.9 percent down from the same period last year. JP Morgan lowered its 2009 average oil price forecast from 69 dollars to 43 dollars.
In London, Brent crude for February delivery fell 2.17 dollars to settle at 43.36 dollars a barrel on the ICE Futures Exchange.
(Xinhua News Agency December 19, 2008)