Thread: Oil prices sink under $40

Oil prices keep falling and oil companies say that have more oil that they can sell so they are cutting down on production yet gasoline prices keep rising.

Oil prices sink under $40 after poor US data
Feb 6 11:02 AM US/Eastern

http://www.breitbart.com/article.php?id ... _article=1

Oil prices plunged below 40 dollars a barrel in New York on Friday, as grim unemployment data stoked concerns about weak energy demand in key consumer the United States, traders said.

New York's main futures contract, light sweet crude for delivery in March, fell as low as 38.60 dollars per barrel. It later stood at 39.54, down 1.63 dollars from the close on Thursday.

Brent North Sea crude for March dropped 1.23 dollars to 45.23 dollars a barrel in London.

The US unemployment rate surged in January to 7.6 percent, the highest since 1992, as 598,000 jobs were cut, the Labor Department reported Friday.

The number of job losses for the recession-hobbled economy was the worst since 1974, according to the monthly Labor Department report on nonfarm payrolls, seen as one of the best indicators of economic momentum.

The oil market has been hit this week by mounting concern that the US -- the world's biggest energy consuming nation -- will slash its energy demand to cope with a dramatic downturn, according to analysts.

Official data showed Thursday that initial claims for US unemployment benefits surged to 626,000 last week, the highest level since October 1982, heightening fears about the length of an economic slump.

"Crude oil fell on concern that fuel demand in the US... may decline, as a report showed the number of newly jobless climbed to a 26-year high," said BetOnMarkets analyst Dave Evans.

The market was also dragged lower this week by news of rising American crude inventories.

US government data showed Wednesday that crude stockpiles had soared by 7.2 million barrels last week, more than double the 2.9 million barrels forecast by analysts.

It was the fifth consecutive week of gains, and the sharp rise underlined slack demand amid the global financial crisis that has brought the world economy to a near-halt.

After plunging from record highs above 147 dollars last July, oil prices touched multi-year lows in December, at one point nearing 32 dollars a barrel.

The Organization of the Petroleum Exporting Countries (OPEC) last week signalled it would consider more reductions in output as its members try to lift prices and, in turn, their incomes.

OPEC, which pumps about 40 percent of the world's oil, announced production cuts totalling 4.2 million barrels per day late last year. The cartel is to meet again next month.

Yep, gas has definitely been on the rise in my neck of the woods. Was paying around $1.77 a week to 10 days ago and am now paying around $1.87.