A sharp fall in oil prices has prompted Opec to bring forward a meeting on the impact of the financial crisis.
By Telegraph Staff
Last Updated: 5:14PM BST 16 Oct 2008
With a barrel of Brent crude down more than 50pc on its July peak of $147, the oil cartel said it would now meet on October 24.
Last week the Organization of Petroleum Exporting Countries said it was going to meet on November 18 "to discuss the global financial crisis, the world economic situation and the impacts on the oil market".
Oil has followed movements in equity markets this month and with share prices down sharply worldwide, the price of a barrel of Brent crude in London was trading down $4.60 at $66.20 in afternoon trading - a 15-month low.
"Following consultations with the president of the OPEC Conference and colleague ministers, it has been decided to re-schedule the extraordinary meeting of the OPEC Conference," the cartel said in a statement, citing a decision by OPEC Secretary General Abdalla Salem El-Badri.
"The Organization is concerned about the deteriorating economic conditions," it said in a statement.
"The subprime mortgage problems that have been observed for a long time have created a shock wave in financial institutions resulting in huge losses, and an escalating credit squeeze which has turned into a deep financial crisis."
Tightening credit has eroded demand and pushed prices down 18pc from a year ago, and 51pc from the record $147.27 a barrel reached on July 11.
OPEC yesterday cut its forecast for demand next year by 450,000 barrels a day, or 0.5 pc, to 87.2m barrels a day because of "dramatically worsening'' financial market conditions.
"Demand not just for energy but across all consumer products is going to be hit,'' said Jonathan Kornafel, a director for Asia at Hudson Capital Energy in Singapore.
"That's just going to export recession to Asia and the manufacturing economies. Next year is not going to be pretty.''
Federal Reserve chairman Ben Bernanke said yesterday that efforts to calm financial markets will probably not result in an immediate economic rebound.
Fears that the world was heading for an economic slowdown saw oil prices fall to their lowest level for nearly 14 months, impacting on several areas of consumer spending and raising hopes that consumer price inflation, which hit a 16-year high in September at 5.2 per cent, may be about to decline.
One upside to the drop in oil to a 14-month low has been a cut in petrol prices. Yesterday oil company BP and supermarket chains Asda and WM Morrison cut the price of unleaded petrol to 99.9p a litre.
