Financial Crisis Triggers Fall of Oil, Metals and Food Prices

Oil, metals and food prices all plummeted last night whilst analysts fear a global crisis triggering a drop in demand.

North Sea crude oil has hit its lowest level in 12 months falling to $84 a barrel. Car owners should feel relief although motoring organisations have long complained that oil companies are slow to cut pump prices when crude values fall.

Members of OPEC were immediately in discussions about reducing output to correct what it called oversupply.

The benchmark US light crude for November delivery was down by more than $4 to $88 in its fourth consecutive day of losses. This comes after the near 40% fall in oil prices since they hit $147 in July, and North Sea Brent crude was also down by $6 to $84 a barrel.

Edward Meir, of the broker MF Global, said: "The prevailing macro sentiment is now crystallising around the notion that we are heading into a synchronised global slowdown, a mirror image of the across-the-board expansion we saw from 2004 to early 2007."

Oil demand in the United States, the world's top energy consumer, has dived this year under the weight of record prices, while consumption in Japan and Europe has also weakened.

There are now worries about whether China, where rapid economic growth helped trigger oil's rise from $20 a barrel in 2002, can keep delivering consistent growth.

Coffee, sugar and grain prices were down sharply, while copper fell by almost 8% to a 20-month low although gold, a traditional safe haven in turbulent times, was firmer, recouping losses caused mainly by the strong dollar.