Oil prices sank today (Dec. 4) to lows last seen nearly four years ago as more bleak news from the world’s largest economy raised fears crude could tumble below $40 by the end of the year.
After sinking more than $1 earlier in the day to approach levels traded at in February 2005, light sweet crude was trading at $46.10, down 69 cents in electronic trading on the New York Mercantile Exchange (NYMEX) by noon in Europe. The contract fell 17 cents overnight to settle at $46.79, according to the Associated Press.
“You could see prices testing $40 by the end of the year because the economic data is really ugly at the moment,” said Christoffer Moltke-Leth, head of sales trading at Saxo Capital Markets in Singapore. “Demand destruction is still very much the concern.”
Oil prices have tumbled about 69% since peaking at $147.27 in July. But trader and analyst Stephen Schork suggested that the price decline had some ways to go before bottoming out, despite the arrival of the cold season in the U.S. and elsewhere in the Western hemisphere, which traditionally drives up demand.
“The only place colder than the (U.S.) Northeast and Midwest is the floor of the NYMEX,” he said, in his Schork Report.