Oil prices have fallen back below $39 a barrel, amid evidence of further economic deterioration cutting energy consumption. US jobless data released on Friday set the tone for the market, with crude continuing to slide despite news that Saudi Arabia planned deeper than expected production cuts, continued gas-supply disruptions in Europe, and no let-up in Israel's military assault on Gaza. US government figures showed employers in the world's biggest economy cut 524,000 jobs in December, driving the nation's unemployment rate to its highest level in almost 16 years.
"The US unemployment numbers on Friday started the latest leg downwards. We have had a string of bad news, with companies and economies all reporting negative data. It is almost relentlessly bad," said Rob Laughlin, a senior oil analyst at MF Global in London. Increasing volumes of oil in storage at Cushing, Oklahoma, the delivery point for crude traded on the New York Mercantile Exchange, have also weighed on oil prices. Last week, the Cushing stockpile climbed to 32.2 million barrels, its highest since the US Energy Department started tracking the supplies in 2004.
Record production cuts announced by Opec in December are unlikely to support prices until the global overhang of stored oil has been reduced, analysts said. tcarlisle@thenational.ae