Oil price hit a 22-month low of $55 a barrel. The price was $147 per barrel in july. I wont be surprised if the price drops to $30 soon. OPEC will as usual cut production but this strategy won't work for them cuz demand is falling rapidly.
OPEC on Wednesday agreed to slash a record 2.2 million barrels from its daily production as of Jan. 1, while the bloc's outsiders Russia and Azerbaijan announced their own cutbacks of hundreds of thousands of barrels from the market.
Oil prices tumbled close to four-year lows after the announcement, however, a clear indication of the growing belief that the world is heading for a long and painful recession in which energy use will continue to erode.
In just five months, crude has given up all of the price gains made over the past four years.
Crude sank to $40.20 after the announcement, a price not seen since the summer of 2004.
Making matters worse for OPEC, Moscow distanced itself from direct ties with the 13-nation producers' group, further dampening OPEC hopes of coordinated
production cuts that might put a floor under crude prices.
OPEC said oil ministers of the 11 nations under the group's quota system agreed to take 4.2 million barrels a day off the market, but that includes two previous announced cuts that totaled 2 million barrels.
That leaves the new output reduction announced Wednesday at 2.2 million barrels - the largest single production cut ever.
Source: Associated Press