Plunging global stock markets heightened concern that a recession will slash fuel consumption as crude oil fell to the lowest since May 2007 in New York yesterday
Plunging global stock markets heightened concern that a recession will slash fuel consumption as crude oil fell to the lowest since May 2007 in New York yesterday.
Energy prices also dropped as the dollar rose to the highest in more than 2 1/2 years against the euro, dimming the appeal of commodities as a hedge. OPEC may make an additional output cut if its Oct. 24 decision to lower production fails to bolster prices, said Mohammad Ali Khatibi, Iran's representative to the group, according to the country's state-run Mehr news agency.
"Everyone is watching stock-market tickers and not OPEC," said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Mass. "We want to see the full effect of the recession on demand, and until that happens prices will trend lower."
Crude oil for December delivery fell 93 cents, or 1.4 percent, to close at $63.22 a barrel yesterday on the New York Mercantile Exchange, the lowest settlement price since May 29, 2007. Prices, which have tumbled 57 percent since reaching a record $147.27 on July 11, are down 31 percent from a year ago.
In Massachusetts, gas prices continued to fall with a 20-cent drop over the last week, AAA Southern New England said. AAA said its survey yesterday of Massachusetts gas prices found self-serve, regular unleaded averaging $2.64 per gallon. Massachusetts is currently 3 cents below the national average for regular unleaded.
Oil is heading for a 37 percent drop this month, the steepest since at least 1988 in New York, as the Organization of Petroleum Exporting Countries cut oil production for the first time in almost two years. The 13 OPEC nations agreed to reduce supply by 1.5 million barrels a day starting in November.
Author:
Jo Amey
