Oil Price Drops 8%
Oil fell as much as 8 percent on Friday, kicking off 2009 on a weak note.
US light, sweet crude fell $2.94 to $41.66 a barrel after earlier sliding by as much as $3.52, or almost 8 percent, reversing a part of Wednesday's $5.57 a barrel gains. Oil tumbled 54 percent in all last year.
London Brent dropped $3.04 to $42.55 a barrel.
Oil products helped trigger the surge on the last trading day of 2008 after weekly US data showed a fall in refinery activity and an unexpected 500,000-barrel rise in crude stocks, stoking worries that fuel supplies could grow tight.
Inventories of refined products also rose, though less than analysts had expected. Gasoline stockpiles increased by 800, 000 barrels, less than forecasts for a 1.5 million-barrel build, while distillates rose by 700, 000 barrels, below expectations for a 1.1 million-barrel increase.
But demand remained lower than a year ago, underscoring the dual impact of last year's record-high prices followed by a deepening economic recession, which combined to knock oil prices more than $100 off their $147 a barrel July peak.
Factory activity surveys in the United States and Europe due on Friday are expected to show steeper contractions in December.
Demand is also faltering in emerging Asia, with Chinese commercial fuel stocks rising to another record high in November, while Indian refinery production fell versus a year ago for the first time in three years.
Faced with slumping demand and prices, producer grouping OPEC last month agreed to lower output by 2.2 million barrels per day, its deepest reduction ever, taking its total cuts since September to the equivalent of 5 percent of world supply.
Evidence is mounting that OPEC is complying with its goal to reduce production, led by top exporter Saudi Arabia.
Oil markets have also watched anxiously the dispute between the world's biggest non-OPEC oil exporter, Russia, and its neighbours over natural gas supplies.
In Ghana, the prices may go down if the trend continues.
The new president, expected to be sworn into office on Wednesday, January 7 would have to quickly review petroleum prices downwardly if world market prices continue to decline.
On December 12, the National Petroleum Authority (NPA), regulator of the petroleum industry reviewed fuel prices downwardly between 14 and 30 percent.
The downward adjustment led to significant drop in prices of petrol which now sells at GH¢3.15 per gallon while diesel goes for GH¢3.5