Oil prices take another tumble

LONDON, October 31, 2008 (AFP) – Oil prices fell heavily again on Friday as the prospect of a global recession and weakening energy demand weighed on the market, analysts said.

New York’s main contract, light sweet crude for December delivery shed 1.46 dollars to 64.50 dollars per barrel.

London’s Brent North Sea crude for December lost 1.64 dollars to 62.07 dollars.

Prices had fallen on Thursday after data showed that the US economy — the biggest consumer of energy in the world — contracted in the third quarter.

The market was also hit by news that the US government’s Energy Information Administration (EIA) downgraded its August estimate for US oil demand.

“Sentiment turned bearish (negative) as the government figures revealed that the US economy shrank,” said analysts at the John Hall Associates consultancy in London.

“Weakening demand remains the key driver with the release of monthly data for August revealing that US demand ran well below year-ago levels.”

The US economy contracted at a 0.3 percent annualised pace in the third quarter as a global credit crunch saw consumers and businesses cut back on spending.

The decline, not so s