Oil prices dip below $62 despite OPEC production cutbacks

by Tina Kells | October 27, 2008 at 11:14 am

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Oil prices hit a record low for the year, dipping below $62US per barrel before rebounding slightly to close at just over $63US. OPEC had announced cutbacks to crude output but this appeared to have little effect on the dropping price of oil. Anticipated declines in demand, a result of the growing economic crisis and consumers weary of historically high gas prices at the pump, have kept the price of oil down.

Oil prices fell to their lowest level in more than a year Monday before rebounding to just above $63 a barrel as growing evidence of a global economic slowdown had investors betting on a further drop in energy demand.

Traders undeterred by OPEC's sizable production cut late last week also appeared to be taking their cues from world stock markets, which slumped again Monday with the Nikkei index in Japan closing at its lowest in 26 years, down 6.4 percent. Hong Kong and European markets followed suit, closing or trading substantially lower.

Wall Street was wavering in morning trading, with the Dow Jones industrials up about 41 points, or 0.19 percent, at the 8,420 level after having fallen more than 100 earlier.