Oil Price Reaches $35 Per Barrel Amidst Weak US Economy
Oil price was down 2 cents from its midday price of $35.38 per barrel. This continuous decline of oil price is due to low consumer demand for this commodity as businesses halt its operation to cut costs. Meanwhile, experts remain pessimistic over the economic outlook for this year.
Oil price fell $35 per barrel on Friday as global demand is continuously declining due to worldwide economic slowdown and weakening US economy.
According to economic analysts, since US is the world’s biggest consumer of oil, its weak economy will have a direct impact on the demand and price of this commodity, adding that the widespread unemployment and low consumer confidence will directly affect the demand of crude oil.
In New York Mercantile Exchange, the contract experienced a sharp decline, falling $1.88 overnight settling at $35.40.
Oil price continuously decline, almost dipping 30 percent low since last week when the price was down to $50.47.
Meanwhile, traders and analysts predicted that oil demand is expected to decline for the next few months as the country is expected to feel the deepest recession during the second-quarter of the year.
According to a report conducted by the American Petroleum Institute, the demand for oil fell 6 percent to almost 19 million barrels per day in 2008.
The report also stated that majority of the affected products by low demand are made from crude.
With low demand for oil, Organization of Petroleum Exporting Countries (OPEC) had cut its production to more than 4 million barrels a day since October last year.
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