- The Washington Times - Tuesday, December 2, 2008

COLUMBUS, Ohio

Oil prices tumbled below $50 a barrel Monday as National Bureau of Economic Research reported that the U.S. economy has been in a recession for a year and the Dow Jones Industrial Average fell nearly 680 points.

Light, sweet crude for January delivery fell more than 9 percent, or $5.15, to settle at $49.28 a barrel on the New York Mercantile Exchange.

Crude has lost nearly 70 percent its market value since July when it peaked near $150 per barrel.

Analyst Phil Flynn with Alaron Trading Corp. said the $50 price remains significant psychologically for traders.

“It opens up the possibility of further declines,” he said.

In a note to investors Monday, Raymond James Equity Research slashed its 2009 oil-price forecast from $90 per barrel to $60 per barrel.

The rout in oil markets came on the heels of a meeting over the weekend in Cairo, where the Organization of the Petroleum Exporting Countries said it would not cut production before it meets again in three weeks.

On Saturday, Saudi Oil Minister Ali Naimi said that OPEC will do what needs to be done to shore up oil prices when the group meets Dec. 17 in Algeria.

OPEC, which accounts for about 40 percent of global supply, cut output by 1.5 million barrels a day in October, bringing total cuts to about 2 million barrels a day this year.

Those measures have had no discernible effect on oil prices, which have fallen a further 26 percent since the last round of production cuts Oct. 24.

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