Singapore: Oil tumbled to a three-and-a-half year low below $49 a barrel on Friday, nearing a $100 drop from its July record high, as more distress for the global economy threatened to eat further into demand for fuels.
Asian stock markets dropped to a five-year low on Friday, tracking US stocks that hit their lowest in a decade the previous session as the fate of the country's major car makers continued to hang in the balance.
US light crude for January delivery fell $1.02 to $48.40 a barrel at 0209 GMT, its sixth straight session of falls and a 14 per cent drop for this week alone, heading for the largest weekly fall since early October. London Brent crude shed 68 cents to $47.40 a barrel.
"The economy is pulling everything down like a black hole," said Anthony Nunan, risk management executive at Tokyo-based Mitsubishi Corp. "Until the economy stabilises, it will be hard for oil to put in a bottom."
Oil has lost two thirds of its value in just under four months since peaking above $147 in July, and is just above the lowest since May 2005 hit on Thursday.
Reflecting the sharp reversal in oil's fortunes, Goldman Sachs, which in May had been talking of a $200 a barrel superspike, on Thursday again cut its 2009 forecast for US crude oil to $80 a barrel from $86.
As demand tumbles, oil companies plan to store millions of barrels of crude in the hope economics will improve. Shipping brokers said US oil trader Koch and Royal Dutch Shell had booked supertankers capable of storing 10 million barrels of crude, more than top exporter Saudi Arabia produces in a day.
The further falls in oil prices brought more Organization of the Petroleum Exporting Countries members out in support of further output cuts. Libya's top oil official said the cartel may decide to reduce supply further at its informal meeting in Cairo next week if it finds members have implemented a previous decision to lower output.
The comments followed remarks from other OPEC members, including Kuwait, Iran and Venezuela, raising the possibility of a further cut in supply to prop up oil prices.
OPEC agreed in October to cut output by 1.5 million barrels per day, about 5 per cent, from Nov. 1, but the move has failed to stem the decline in oil prices.
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