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December 18, 2008
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Thursday
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Zilhaj 19, 1429
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Oil price falls despite Opec output cut
NEW YORK, Dec 17: A historic supply cut by the Organisation of Petroleum Exporting Countries meant to raise the price of oil, instead sparked a sharp drop to a four-year low on Wednesday that added to the sense of gloom over beating back the global economic slowdown.
The oil market displayed its pessimism by pushing prices down more than six per cent, briefly nearing $40 a barrel, after Opec said it was cutting supply by 2.2 million barrels per day to help raise prices. Dealers said it would not be enough to counter slumping world energy demand.
“The world economy is driving the price more than anything OPEC can do at this stage,” said Gary Ross, CEO of consultancy PIRA Energy. “It will be hard for the cuts to have any traction with regard to price in a deteriorating economic environment.”
The price of oil has dropped more than $100 a barrel from a high of $147 in July.—Reuters
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