Oil Price Falls Sharply

Commodities prices fell sharply this week as fears mounted that the crisis in financial markets would drag the global economy into a deep recession.

The Reuters-Jefferies CRB index, a global benchmark for commodities, fell 10.1 per cent on the week, to its lowest level in 20 months.

US oil prices on Friday sank below $80 a barrel for the first time in a year. Nymex November West Texas Intermediate dropped to a low of $78.61, before recovering slightly to trade $6.09 lower at $80.50, down 14.2 per cent this week.

Opec has called an emergency meeting in November, prompting speculation that the cartel will cut output to stem the fall in oil prices.

ICE November Brent sank to $75.00 a barrel, its lowest level since September 2007, and later traded $6 lower at $76.66, down 15.1 per cent this week.

The International Energy Agency, the energy watchdog, on Friday cut its forecasts for global oil demand this year and next and warned that the financial crisis risked tipping developed countries into outright recession”.

Gold jumped to the highest in nearly 11 weeks as investors sought bullion as a haven after Asian stocks tumbled on a deepening credit crisis and worsening global economic outlook.

Bullion for immediate delivery jumped as much as 1.6 percent to $927.90 an ounce, the highest since July 29. It traded at $922.13 at 2:52 p.m. in Singapore. Silver for immediate delivery rose 0.7 percent to $12.19 an ounce.

TradingEconomics.com, Financial Times
10/10/2008 1:18:41 PM