Oil prices down on economy fears

Oil prices continue to fall over renewed concerns regarding the global economic downturn.

Negative data from the US, including a surprise 1.1 per cent fall in retail sales for March, appear to have led to the declines.

Yesterday evening, the spot price for brent crude stood at $52.80, 0.4 per cent down on the day.

Oil price trends tend to be linked to the overall macroeconomic outlook, with increased output generally leading to increased demand for the commodity and vice versa.

Accordingly, costs fell sharply in the second half of 2008, as the global credit crunch translated into a sharp downturn in the real economy.

Crude hit an all-time record of $147 per barrel in July 2008, before retreating to under $40 later in the year.

Speaking to the BBC, Ben Westmore, energy analyst with National Australia Bank, commented: ’Demand will have to come back before you see the oil price move up from $50 in a sustained way.’

The International Monetary Fund predicted last month that 2009 would see a near-unprecedented annual net contraction in the global economy.ADNFCR-2318-ID-19121590-ADNFCR