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Oil prices drop below $50/barrel

21 November 2008 08:52 (UTC +04:00)

Baku. Vahab Rzayev - APA-Economics. New Yorkâ€™s main futures contract, light sweet crude for January delivery, dropped 59 cents to $48.83 a barrel.
The December contract plunged $4.00 a barrel before ending at a closing price of $49.62 on the New York Mercantile Exchange yesterday. The contract earlier hit an intraday low of $48.64, a level last seen in May 2005.
Brent North Sea crude also plunged through the psychological barrier of $50 a barrel.
As economic slowdown has destroyed fuel demand, oil companies plan to store millions of barrels of oil in the hope things will improve.
Shipping brokers said US oil trader Koch and Royal Dutch Shell have booked super-tankers capable of storing 10 million barrels of crude, more than the top exporter Saudi Arabia produces in a day.
Oil has lost about two-thirds of its value since Julyâ€™s record above $147, in part because a global credit squeeze has made investors pull their money out of riskier assets.
Since early September, Opec has said it will remove around two million barrels per day from international markets, but the market has taken the view that falling demand is a bigger factor than tightening supply.
Deutsche Bank said this week it believes that oil could fall to as low as $40 a barrel next year.