December 19, 2008 in Nation/World

Crude declines as economy struggles

Associated Press
 
Tags:oil

Oil continued its downward march Thursday as mass layoffs pushed the U.S. economy deeper into recession, signaling a drastic pullback on energy spending.

Light, sweet crude for February delivery fell $2.94 to settle at $41.67 a barrel on the New York Mercantile Exchange. The January contract, which closes today, fell 9 percent, or $3.84, to settle at $36.22 after dropping as low as $35.98, levels last seen in June 2004.

Higher prices for the February contract suggest that oil brokers and traders believe OPEC’s unprecedented 2.2 million-barrel daily production cut, announced Wednesday, will tighten supply.

The Organization of Petroleum Exporting Countries had already taken 2 million barrels of oil out of production, bringing total cuts to more than 4 million barrels per day.

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