21 November 2008 | Jake Kanter
The price of oil has fallen to its lowest point in four years as the economic downturn has hampered demand for the commodity.
Today the Opec crude oil basket price stood at $44.06 (£30) a barrel, the lowest reading since October 2004. Experts said the current financial crisis has affected demand and created a downward pressure on prices.
Damien Cox, analyst at energy procurement consultancy John Hall Associates, said: "The primary focus is on demand. There is a weakness due to the downturn in the economy. It is a reasonable assumption that if demand continues to fall, prices will follow."
He added the drop is having a "deflationary effect" on other commodity prices as well as transport costs. John Westwood, chairman of analysts Douglas-Westwood, agreed, adding all commodities are linked to the cost of oil input and prices would decline.
Westwood also said that this year's market volatility has been "unprecedented" and the collapse in oil prices from a record high of nearly $150 a barrel in the summer was "totally irrational". He said the markets have over-reacted to reduced demand.