Oil fell to $42 a barrel, the lowest since Jan. 4, 2005, after the Labor Department said today the U.S. lost 533,000 jobs last month. Prices have fallen 22 percent this week after the U.S., the world’s biggest fuel consumer, was declared to be in a recession.
Crude oil for January delivery fell as much as $1.67, or 3.8 percent, to $42 on the New York Mercantile Exchange. The contract traded at $42.43 at 1:52 p.m. London time.
Oil has fallen 70 percent since reaching a record $147.27 a barrel on July 11. Crude’s weekly drop is the largest since a 24 percent decline during the week ending March 21, 2003.
The International Energy Agency cut its global oil demand forecast for 2009 because of the world economic slowdown.
The Paris-based agency reduced its demand forecast by 170,000 barrels a day from its November estimate to 86.37 million barrels a day, analyst David Martin said in a phone interview today as the agency issued an update to its July Medium-Term Oil Market report.
U.S. fuel demand during the four weeks ended Nov. 28 was down 6.2 percent from a year earlier, an Energy Department report showed Dec. 3.
The economies of the U.S., Japan and Europe are all in recession for the first time since World War II. The European Central Bank yesterday cut its benchmark interest rate by the most in its 10-year history to stem the collapse. The Bank of England and Sweden’s central bank followed with reductions.
Brent crude oil for January settlement fell as much as $1.50, or 3.6 percent, to $40.78 a barrel on London’s ICE Futures Europe exchange. The contract traded at $41.17 a barrel at 1:48 p.m. London time.
Qatar’s oil minister said on Dec. 3 that the Organization of Petroleum Exporting Countries will definitely” cut output at its next meeting in Algeria on Dec. 17.
OPEC oil ministers agreed on Oct. 24 in Vienna that the 11 members with quotas would lower supply by 1.5 million barrels a day starting in November. Production by the 11, excluding Iraq and Indonesia, declined 725,000 barrels to 28.24 million barrels a day last month, according to data compiled by Bloomberg News.