SC: Commodities: Oil price slides as supplies pile up
LONDON (SHARECAST) - Fears of a global recession continue to weigh down oil prices. With the world’s major economies expected to tip into recession, demand for oil is projected to slacken.
The price of the crude for November delivery fell below $70, sliding $4.69 to $69.85, its lowest level in more than a year.
Output is not yet being scaled back to match reduced demand expectations, although the Organisation of Petroleum Exporting Countries (OPEC) is expected to lower output quotas soon.
In the meantime stockpiles in the US continue to grow. Crude supplies rose by 5.6m barrels in the week ending 10 October, to 208.2m barrels, according to figures release by the US Energy Administration.
Petrol inventories increased by 7m barrels to 193.8m last week, the American Petroleum Institute reported.
Gold fell out of favour on Thursday with the December futures contract falling to its lowest level for a month.
Gold for December delivery tumbled 4.1% to $804.50, down $34.50 on the day, as a wave of selling from hedge funds and central banks drove down the price of the yellow metal.
Gold is normally regarded as a safe haven for investment in the sort of turbulent markets currently being experienced, but dealers suggested that with gold prices equally volatile, “cash is king”.
