With the US unemployment figures pointing to less production and less demand for oil, the price of a barrel of crude has dwindled to a four-year low. US light sweet crude was trading for a shade over US $42 a barrel, more than a US $100 less than the price in July. Brent crude today even dipped under the US $40 level. Forecasts for growth in oil demand have been cut by around a third to 86.37 million barrels per day.
Some analysts predict that crude will fall beneath US $25 a barrel if ever the recession infects China. The President of OPEC has urged the cartel to decide to significantly cut output when it next meets in Algeria on December 17. But those filling their cars, vans and lorries with petrol have not noticed the dramatic fall in price at the pump. “I don’t think the price cut has been passed on completely,” said an Austrian motorist. “The price of crude has fallen drastically these last few weeks, while at the pumps it’s only come down slightly. I hope there’s still scope for it to drop further.” Many analysts expect the decline to continue and be reflected at the pumps. But such is oil’s volatility, only a few months ago analysts saw crude rising to US $200 a barrel.