Oil down to $35 a barrel as decrease in global demand leads to oil production slowdown.
The supply cuts announced by OPEC last month coupled with worries about the current economic climate are finally having an affect on the global oil market.
An oil price rise looks more likely after Opec nations and those outside the cartel have lessened their supply to coincide with falling demand.
Saudi Arabia, the Opec group’s biggest and most important member, recently announced it would cut even more of its output than it had stated at Opec’s meeting in Algeria in December.
Refiners are looking for supplies to replace the oil they are no longer being offered by Opec countries such as Saudi Arabia, Iran and even Venezuela.
Global oil demand is expected to contract by 430,000 barrels per day in 2009, A Reuters poll on Wednesday showed. This is deeper than they had forecast previously, as the economic crisis spreads to the developing world.
Oil prices were as low as $35 a barrel last week, meaning business energy prices offered by suppliers are gradually coming down. Oil hit a high of $147 a barrel in July 2008 when demand was at its peak.