oil trades

Oil trades at $61 a barrel, in sync with ecconomic news
by The Associated Press
Friday November 07, 2008, 4:25 AM

Oil prices were steady near $61 a barrel Friday in Asia, pausing after a two-day plunge, but vulnerable to another steep fall as evidence of a severe U.S. recession continues to mount.

Light, sweet crude for December delivery was up 38 cents at $61.16 a barrel in electronic trading on the New York Mercantile Exchange by late afternoon in Singapore. Oil prices overnight fell $4.53 to settle at $60.77 after dropping $5.23 the previous day.

"There's a lot of gloom and doom right now," said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore. "Mounting bad news on the economic front is negatively affecting oil."

A slew of grim economic news Thursday led traders to dump oil on concerns over weakening demand for crude products, such as gasoline.

The number of Americans continuing to draw unemployment benefits surged to a 25-year high, the Labor Department said Thursday, and the U.S. retailers saw their sales plummet last month to the weakest October level since at least 1969.

The bad news sparked a sell-off in equity markets as well. The Dow Jones industrial average fell 4.9 percent Thursday, while Asian markets were mixed Friday. Japan's benchmark Nikkei 225 stock average fell 3.6 percent while Hong Kong's Hang Seng index rose 3.1 percent.

"Oil continues to trade in lockstep with stock markets," said Shum. "More bad news could push oil into the $50s."

Oil prices have fallen nearly 60 percent since peaking at $147.27 a barrel in mid-July.
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COMMENTS (1)Post a comment
Posted by letsbreal67 on 11/07/08 at 6:59AM

Then gas prices should be much lower. The gas prices are not declining as fast as they raise them. Exxon still made billions of dollars in profil last quarter so prices should keep dropping.