Greg Gerber posted on October 10, 2008 09:11
SINGAPORE -- Oil prices plummeted to a one-year low below $83 a barrel Friday in Asia as investor fears of a severe global economic downturn sparked a panicked sell-off of equities and crude.
Light, sweet crude for November delivery was down $4.35 to $82.24 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore, the lowest since October 2007. The contract overnight fell $1.81 to settle at $86.62.
"The whole market has lost confidence in everything," said Mark Pervan, senior commodity strategist with ANZ Bank in Melbourne. "Everyone is worried about global growth, and oil is the front line commodity for that. There's just a lot of panic and fear in the market."
Oil investors even ignored signs that the Organization of Petroleum Exporting Countries may cut production. OPEC said Thursday it will hold an extraordinary meeting Nov. 18 to discuss how the widening global financial crisis is affecting oil prices. On Thursday, the head of Libya's national oil company, Shukri Ghanem, called on oil producing nations to cut output.
"OPEC is trying to jaw-bone the price up, but they'll have to come into the market because no one is going to be believe just jaw-boning with the market sliding so quickly," Pervan said. "The market is so demand focused, it doesn't even care what happens to supply."
Oil prices have fallen about 44 percent since soaring to a record $147.27 on July 11.
"We haven't seen the bottom of this yet," Pervan said. "We thought $75 would be a floor but if the market mood doesn't change, $50 to $60 a barrel is not out of the question."
SOURCE: Breitbart