Oil prices plunge

Oil plunged to its lowest price of the year Monday on concerns about the slowing global economy and future demand for oil and gas.

Benchmark West Texas Intermediate crude fell US$5.57 to US$81.31 per barrel on the New York Mercantile Exchange.

Earlier it dropped as low as US$82.52. That is the lowest price of the year for crude, but it's still higher than the US$71.63 per barrel low of the past 12 months. Oil hit that on August 24 of last year.

Brent crude, used to price many international varieties of crude, fell US$3.12 to US$106.25 per barrel on the ICE Futures exchange.

In the past two weeks, oil prices have dropped nearly US$16 per barrel.

The share of global oil demand in emerging markets has risen from 44 per cent in 2008 to 48 per cent this year, Barclays Capital said in a report for clients. China's share of global oil demand has increased more than 2 per cent in the same period.

Goldman Sachs analysts also believe oil prices will rise next year. They told clients in a note published Friday that the risk of a US recession has risen, but their revised US economic outlook remains consistent with a recovery at a slower pace, "which is typical following a housing bust."

In addition Goldman said the outlook for economic growth in China and other emerging markets is positive.

- AP