West Texas Intermediate (WTI) crude for December delivery fell below US$50 in trading on the New York Mercantile Exchange Thursday on projections of continued lower demand. WTI fell as low as US$48.24 in trading, but at 1630 hours Eastern, Bloomberg was showing the price as US$49.00.
December contracts closed today, shifting attention to January delivery. WTI for January fell to US$49.42.
WTI is the benchmark price quoted in media reports even though 80% of the world's light sweet crude - including the Newfoundland and Labrador offshore - is traded based on pricing of North Sea Brent.
Brent for January fell to US$48.08 on Thursday.
Many are wondering where the bottom will be for crude prices. WTI has been above US$50 since September 2004 and it is likely that sustained period that led many analysts to forecast - and to continue to forecast - high oil prices into next year. Associated Press reported Thursday that Goldman, the analysts who had earlier said oil would hit US$200 a barrel by year end, have stopped oil trading recommendations. The company is sticking by its forecast that oil will rebound to US$107 by the end of 2009.
Those sorts of analyses are getting harder to find, however. As Bloomberg reported:
Prices may fall as low as $40 a barrel by April, Deutsche Bank AG said in a report yesterday. The Organization of Petroleum Exporting Countries potentially needs to cut production by 2.5 million barrels a day to reduce output in an oversupplied market, the note said.
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