US CRUDE oil futures settled 2% lower yesterday on concerns about the American economy after the Federal Reserve cut its target for overnight interest rates.
The slide came despite the dollar falling sharply and on expectations Opec will cut production sharply today.
January crude in New York shed 91 cents to $43.60 a barrel, while Brent crude in London settled four cents lower at $44.56.
Opec said in its monthly oil market report that demand for its crude was expected to fall by an average of 1.4million barrels per day next year, with an even steeper decline in the first half.
It predicted the first drop in world oil demand in 25 years as Opec delegates said the export cartel was likely to cut production by as much as 2million barrels per day (bpd) when it meets in Algeria today in an effort to boost prices.
Demand for Opec crude is projected to average 30.2million bpd in 2009, and in the first quarter is forecast to drop by 2.3million bpd versus the same quarter in 2008.