Oil Briefly Falls Below $40 Despite OPEC News

New York, NY, Dec. 18, 2008--Oil prices briefly slipped below $40 per barrel, near 4 1/2-year lows, as investor pessimism over global crude demand outweighed the news of OPEC's intention to cut output by a record amount.

Light, sweet crude for January delivery edged up 47 cents to $40.53 a barrel in electronic trading on the New York Mercantile Exchange. Earlier, it fell as low as $39.19, a level not seen since at least July 2004.

Overnight, the contract fell $3.54 to settle at $40.06 a barrel, after touching $39.88.

The Nymex contract for February delivery, which analysts said better reflected oil price trends, was up 82 cents to $45.43 a barrel.

The 13-nation Organization of Petroleum Exporting Countries, which accounts for about 40 of global oil supply, said Wednesday it planned to reduce its output quotas by 2.2 million barrels a day.

But markets had already expected a vastly reduced flow of oil and traders focused instead on troubling economic data that points to a long and severe global economic slump.