LONDON: Commodity markets dived this week, with oil hurtling towards 60 dollars per barrel and gold ducking 700 dollars an ounce as investors eyed a global recession that could hurt demand for raw materials.
“Recession fears and uncertainty continue to haunt global markets,” said a market analyst.
Crude oil prices hit 17-month lows as recession fears sparked renewed demand concerns, despite news that OPEC will cut oil output by 1.5 million barrels per day.
Brent North Sea crude slumped to 61.00 dollars per barrel, the lowest point since March 2007.
New York’s light sweet crude tumbled to 62.65 dollars, which was last seen in May 2007.
“Crude oil is heading lower again… on fears that the (OPEC) cut might not be sufficient to compensate the shortfall of demand due to a global recession,” analysts said.
The Organization of the Petroleum Exporting Countries (OPEC) said Friday that they would slash output from November 1 in an attempt to stabilise plunging oil prices, despite a looming worldwide recession.
In later trade on Friday, New York crude was 4.59 dollars lower at 63.25 dollars per barrel and Brent oil slid 4.30 dollars to 61.62.
Global stock markets plunged on Friday, with London losing more than nine percent as it struck a five-year low on news that Britain’s economy shrank in the third quarter, placing it perilously close to a recession.
Crude futures in London and New York have plunged close to 60 percent from record highs of above 147 dollars a barrel reached only three months ago when supply concerns sent prices soaring.
The crude market was also dampened as the dollar strengthened against the euro and pound.
A stronger US unit tends to sap demand for dollar-priced commodities like crude oil and gold, which become more expensive for buyers holding weaker currencies.
