6 Dec 2008

Price of oil approaches $US40/b

9:00 am on 6 December 2008

Oil has fallen to almost $US40 per barrel after extensive job losses in the United States.

US payrolls dropped by 533,000 in November in the weakest performance in 34 years.

US crude fell $US2.77 to $US40.90 per barrel by 2:30pm EST (1930 GMT) on Friday after touching $US40.50 - the lowest since December 2004. London Brent crude traded down $US2.20 to $US40.12 per barrel.

The ;atest prices are in contrast to the record of $US147.27 per barrel reached on 11 July.

US and European companies announced further job cuts on Thursday, with US phone company AT&T Inc saying it would eliminate 12,000 jobs, while chemical maker DuPont Co planned to drop 2,500.

Leading US retailers also reported dismal November sales.

Interest rates were cut on Thursday by the European Central Bank, the Bank of England and the central bank of Sweden.

Members of the Organization of the Petroleum Exporting Countries are considering further cuts in production. They are next due to meet on 17 December in Algeria.

In October, OPEC decided to reduce production by 1.5 million barrels per day.