Barrel of oil nears US$60, price last seen early last year, on recesssion fears

Business Materials 6 November 2008 21:56 (UTC +04:00)

Oil prices have neared US$60 a barrel, the lowest point in about a year and a half, as a growing number of economic reports point to a long and painful recession, the Associated Press reported.

The U.S. Labor Department says the number of Americans continuing to draw unemployment benefits surged to a 25-year high, and U.S. retailers saw their sales plummet last month to the weakest October level since at least 1969.

When the economy slows, the demand for energy fades.

Light, sweet crude for December delivery fell more than 6.7 percent, or US$4.36, to US$60.94 a barrel Thursday on the New York Mercantile Exchange. Prices tumbled as low as US$60.16 at one point, a level last seen in March 2007.

Many oil analysts still think a natural range for crude is closer to US$80, but few saw the extent of deteriorating global economy.