Credit crunch hits oil prices

3 October 2008

The ongoing effects of the global credit crunch continued to affect oil prices as they fell again yesterday.

Crude oil for November delivery fell below $94 (£53) a barrel despite the US Senate approving a government economic aid programme worth $700 billion.

Oil prices finished trading at $93.97, a fall of $4.56 on the previous day.

The collapse of Lehman Brothers and the nationalisation of banks in the UK have fuelled fears of a global financial meltdown, which have in turn affected nervous oil traders.

Yesterday, Merrill Lynch revised its predictions for 2009 oil prices to $90 a barrel, down from $107.

However, the investment bank warned that a syncronised global recession could force prices to new lows.

A spokesman for Merrill Lynch said: "A global recession, defined as global GDP growth falling to 1.5 per cent, could bring global oil prices down to $50 a barrel."

The fall has yet to translate into cheaper fuel or petrol prices for consumers in the UK.

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