Oil hits 20-month low on demand fears
LONDON (Reuters) - Oil fell more than 4 percent to below $57 a barrel on Wednesday, its lowest level for 20 months, on expectations of weaker energy demand and as global stock markets headed downwards.
The fall in oil prices prompted OPEC officials to say they might decide to cut oil production further in an attempt to adjust the balance between output and demand.
U.S. crude for December delivery hit a low of $56.73, down $2.60 and its lowest point since March 20, 2007, before rallying to $56.92 by 3:50 p.m..
London Brent crude shed $2.27 to $53.44 a barrel.
The bearish tone was set by the International Energy Agency, which said a slowing world economy may force it to cut further its forecast for oil demand growth when it releases its latest monthly report on Thursday.
Turmoil in the world's financial markets has already led the IEA, which advises many of the biggest economies on energy policy, to cut its assumption for 2008 world oil demand growth to the lowest rate in 15 years at just 440,000 barrels per day.
The head of the IEA said on Wednesday the agency had to take into account the changing view of the global economy.
"We are likely to cut demand ... because the IMF changed its projections on the world economy very dramatically," Nobuo Tanaka told Reuters. Continued...
Ex-Bear managers cleared
Two former Bear Stearns hedge fund managers have been found not guilty of fraud, a decision that could make prosecutors less likely to bring charges against Wall Street executives for their role in the financial crisis. Full Article
Mini-dress drama in Brazil