Oil Prices Keep Falling, Near 22-Month Low

New York, NY, Nov. 19, 2008--Oil prices dipped below $54 to close to a 22-month low on fears of global economic weakness that have sent crude down more than 60 percent in four months.

But analysts suggested that prices might be bottoming out as they moved closer to the psychologically significant $50 mark.

Light, sweet crude for December delivery was down 60 cents at $53.79 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe. The contract Tuesday fell 56 cents to settle at $54.39, the lowest since January 2007.

"Market sentiment is still bearish, but not as bearish as a week ago," said Clarence Chu, a trader with market maker Hudson Capital Energy in Singapore. "Volatility has come down and the market is consolidating a bit."

Oil investors have already priced in a recession in developed countries and only evidence of an especially severe or prolonged slowdown may push prices down further, Chu said.

Prices have fallen 63 percent since reaching a record $147.27 a barrel in mid-July.

"I don't see oil falling below $50," Chu said. "It should be above $60 in a couple weeks."