The New Nation - Internet Edition

AFP, London

World oil prices fell Tuesday below 40 dollars a barrel in thin pre-Christmas trade, as traders eyed weak energy demand arising from a global economic downturn. Light sweet crude for delivery in February delivery shed 1.58 dollars to 38.33 dollars a barrel on the New York Mercantile Exchange (NYMEX). The price of Brent North Sea crude for February sank 1.75 dollars to 39.70 dollars per barrel on London's InterContinental Exchange (ICE).

Both contracts had fallen by about 2.5 dollars on Monday as the market was also plagued by weakening world demand for energy. Losses accelerated Tuesday after confirmation that the American economy-the world's biggest crude oil consumer-contracted by 0.5 percent in the third quarter of the year. The abrupt contraction of gross domestic product (GDP) in the world's largest economy was seen as marking the start of a steep downturn for the United States after GDP growth of 2.8 percent in the second quarter.

"Crude oil markets were lower (on Tuesday) in generally thin conditions amid continuing news of lower global demand," said analyst Nimit Khamar at the Sucden brokerage in London.