Crude oil falls to two-year low

The price of a barrel of oil has fallen to a new two-year low as traders demonstrate their belief that the economic crisis will seriously effect demand.

The price of light, sweet crude oil fell by 92 cents on the New York Mercantile Exchange to $52.70 a barrel in Asian trading. London Brent crude finished more than 1% lower at $51 a barrel.

Analysts now expect prices will fall to $50, from a $147 high in July, "sooner rather than later".

Toby Hassall, an analyst at Commodity Warrants Australia, said: "People are saying this slowdown could be the worst since the Great Depression."

He added: "The stock markets are representing investor pessimism regarding the economic outlook and what we have in store over the next year."

The Dow Jones industrial average dropped to 5.1%, its lowest level since March 2003, as concerns spread that US Congress may not approve a $25 billion rescue package for car makers General Motors, Ford and Chrysler.

Following the fall retailers have faced renewed pressure to match the cuts.

Asda made its 10th consecutive cut since July this week by bringing petrol prices down to 90.9p per litre, the lowest level since April last year. Sainsbury's, Tesco, Total and BP have all followed suit.

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