13 Jan 2009

Price of oil falls further

6:39 am on 13 January 2009

Oil prices have fallen more than 7% on Monday, as global consumption continues to fall amid the recession.

The decline came as Russia and Ukraine signed a deal to help secure the resumption of Russian gas supplies to Europe, cut off for nearly a week in freezing temperatures.

At noon EST (1700GMT) on Monday, US light crude for February delivery was trading at $US37.89 per barrel, down $US2.94. London Brent crude was down $US1.98 at $US42.44.

Job numbers fell by a further 524,000 in the United States in December.

The Labor Department said on Friday that 2.6 million jobs were lost during 2008 - raising the national rate to 7.2%, the highest since 1993.

Oil prices fell 54% last year and are more than $US100 below a record peak above $US147.27 per barrel on 11 July.

Members of the Organization of Petroleum Exporting Countries are reducing production accordingly. The cartel is due to next meet in March.

Its members produce nearly a third of the world's oil.

OPEC agreed last month to cut output by 2.2 million bpd, taking total curbs since September to 4.2 million bpd, roughly equivalent to 5% of global oil supply.