Oil prices drop further, and more to come

Oil prices tumble again overnight, and a weak United States economy will continue the cost cuts

By Samantha Freestone

The price of oil per barrel tumbled again overnight, falling by 2.3 percent as United States consumers tighten their belts.

CommSec Equities Analyst Savanth Sebastian says a barrel of oil now trades at $US65.96, with concerns for the US economy becoming increasingly founded.

"I think you are seeing overnight the demand for US oil was revised significantly," he tells ATN.

He says compared with this time last year demand is down by 8 percent and falling.

"I am concerned for the US economy … but it is great for the consumer at the pump," he says.

The US dollar is strengthening and that "is not going to be good news for US exports".

Sebastian claims the US economy "has contracted", with the fourth quarter "painting a very scary picture".

With the US economy on a downturn for the past six years, it is starting to gain strength.

The oil price will continue to fall unless OPEC cuts production once more, according to Sebastian.

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