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Oil sinks below psychological barrier

07 February 2009 09:14 (UTC +04:00)

Baku-APA-Economics. Oil prices dropped below $40 Friday as the government reported U.S. employers slashed more than a half million jobs last month, the most in 35 years, AP reports.
Light, sweet crude for March delivery fell $1.67 cents to $39.50 a barrel on the New York Mercantile Exchange. Gas prices edged close to $2 a gallon as refineries took units temporarily off-line for seasonal maintenance.
The Labor Department reported 598,000 jobs were lost in January. The unemployment rate rose to 7.6 percent, the highest since 1992.
In London, the March Brent contract gave up $1.11 at $45.35 on the ICE Futures exchange.
Oil traders see layoffs as an instant drag on oil demand. People have less need for gasoline when they no longer have a daily commute. They also cut their spending for toys, nonstick pans, raincoats and millions of other products that are made with petroleum.
The number of people remaining on the unemployment compensation rolls increased slightly to nearly 4.8 million, the most since records began in 1967.