LONDON: Oil prices slumped to just above $46 on Tuesday, reaching the lowest point in almost four years, as global energy demand weakened amid a
widespread economic slowdown.
On London's InterContinental Exchange (ICE), Brent North Sea crude for delivery in January hit $46.02 -- the lowest point since February 18, 2005.
The contract later recovered slightly to stand at $46.60 a barrel, down $1.37 compared to the close on Monday, when Brent had lost a huge $5.52.
On Tuesday, light sweet crude for January fell to as low as $47.36 on the New York Mercantile Exchange (NYMEX). That was the lowest level since May 2005 and followed a dive of $5.15 on Monday.
Later Tuesday, light sweet crude was down $1.30 at $47.98 a barrel.
"I think it's the same-old, same-old: consumption softening," said David Moore, a commodities strategist with the Commonwealth Bank of Australia.
"The data out of the US and other countries support the view that consumption has softened."
Oil prices had fallen sharply on Monday after OPEC decided at a weekend meeting against cutting its production, preferring to wait until December before reducing crude exports.
The cartel's secretary general Abdalla Salem El-Badri said on Monday that OPEC would decide on a "major" output cut next month if the oil market were deemed to be deteriorating.
The Organization of Petroleum Exporting Countries, which pumps 40% of the world's crude, met in Cairo on Saturday to assess the state of the oil market but held off from making any decision on cutting production.
Instead, energy ministers decided that any output move would be made when they next meet in Oran, Algeria on December 17.
OPEC has already slashed output twice this year by a total of two million barrels per day (bpd) in response to plunging prices but fears remain that a global recession could ravage demand for energy.
Meanwhile the production cuts agreed in September and October failed to stop prices sliding under $50 a barrel earlier this month as concern mounted about a global recession that has already infected the eurozone and Japan.
Prices are now down by more than 60% from record peaks of above $147 seen in July but analysts have said OPEC's hands are tied because cutting output could damage the world economy even more.