Barrelling Down

LONDON, December 28, 2008 (AFP) – Oil prices, which hit record highs above 147 dollars a barrel this year before plunging under 33 dollars, risk slumping more in 2009 as recession curbs the world’s appetite for energy, analysts say. “We expect oil prices in early 2009 to remain under pressure given the weakening demand outlook and as global economies continue to slow,” said Nimit Khamar, analyst at the Sucden brokerage in London.

“By the end of the second quarter, we expect prices should stabilise and find a floor, provided OPEC can comply with their recent cuts and continue cutting output.”

The crude market plunged in late December to reach the lowest points for almost five years as weak economic data around the world stoked concerns that a sharp global slowdown will ravage the market.

The Organization of Petroleum Exporting Countries (OPEC) oil producers’ cartel, which pumps 40 percent of the world’s crude, is keen to prevent prices sliding further, as member nations look to protect their incomes.

However, OPEC production cuts agreed in September, October and December have failed to stop the market sliding under 33 dollars earlier this month.

“Heading into 2009, we believe many commodity prices are