Thursday, November 6, 2008

Weak Economy Continues to Put Downward Pressure on Oil Prices

Prices for oil dropped to near $60 a barrel Thursday, the lowest level in close to a year and a half.

With growing consensus showing we will be in for a long economic downturn, consumers are cutting back on everything but buying necessities, drying up oil demand.

The obvious effect of this is also to push gas prices down with oil, and that has many experts saying that could result in gas falling to $2 a gallon by the end of 2008. The AAA says overnight gas prices fell to $2.34 a gallon on average.

In just the last month average prices of gasoline have declined by close to 33 percent in the U.S.

Oil for December delivery settled at $60.77 a barrel on the New York Mercantile Exchange, a drop of $4.53 or 7 percent.

Brent Crude on the ICE Futures exchange in London fell $4.44, to settle at $57.43 for December delivery.

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