What's Happening with Oil?

In London, today, Brent crude oil was trading at $60.55 a barrel. That's down $87 from July! The fall in fuel demand, along with a decline in market confidence has outweighed a decision by OPEC, a cartel of oil producing nations, to cut production by 1.5 million barrels a day.

OPEC has expressed concern that the record high prices in July, and the economic downturn, may have permanently damaged demand for oil. "I think they needed to do something", said Tom Orr, head of research for trading firm, Weeden & Co., in Connecticut. "If prices fall near $50 a barrel, I think they will cut more ... they have to," he added.

This article from the BBC analyses why the price of oil is sinking so fast.