SINGAPORE, Dec 5 — Oil prices were steady near four-year lows below US$44 a barrel today in Asia as more bad US economic news soured the outlook for global growth and demand for crude.
Light, sweet crude for January delivery was down 3 cents at US$43.64 a barrel in electronic trading on the New York Mercantile Exchange by midmorning in Singapore. The contract fell overnight US$3.12 to settle at US$43.67, the lowest since January 2005.
"The damage to the economy by the financial turmoil is much bigger than the market initially thought," said Tetsu Emori, commodity markets fund manager at ASTMAZ Futures Co in Tokyo. "The economic data now is much worse than what we expected a few months ago."
Oil prices have fallen about 70 per cent since peaking at US$147.27 in July.
Dismal economic data continued yesterday in the US, pointing towards a sharp contraction of gross domestic product in the fourth quarter and weakening demand for crude products, such as gasoline.
The government said the number of people continuing to claim unemployment benefits last week reached 4.09 million, the highest level since December 1982, while the proportion of workers receiving benefits matched a level reached 16 years ago, in September 1992.
Factory orders plunged a bigger-than-expected 5.1 per cent in October caused by big cutbacks in demand for steel, autos, computers and heavy machinery. It was the largest decrease since an 8.5 per cent fall in July 2000.
Yesterday, AT&T said it was slashing 12,000 jobs, or about 4 per cent of its work force. Chemicals company DuPont said it will cut 2,500 jobs and media conglomerate Viacom Inc said it will eliminate about 850 jobs.
Investors will be eyeing the US Labour Department's November unemployment report today, which economists expect will show that the jobless rate rose to 6.8 per cent and that companies cut another 320,000 jobs.
"It could take a while before the economy and oil prices really hit bottom," Emori said. "Oil seems headed below US$40."
In London, January Brent crude rose 7 cents to US$42.35 on the ICE Futures exchange. — AP
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