LONDON, Nov 22: Oil prices collapsed this week to under $50, their lowest levels in almost four years, as the market focussed on the threat of a global recession and tumbling energy demand.

Base metals aluminium and copper also hit their worst levels for more than three years as traders fretted about weaker demand from struggling automakers in the United States.

The deterioration in the global economic outlook had led to a significant decline in commodity prices and most notably, energy and industrial metal prices, said Deutsche Bank analyst Michael Lewis.

It has also led to a significant increase in inventories, for example across the industrial metals complex.

OIL: The price of crude oil plumbed depths below the key psychological level of $50.

London’s Brent North Sea oil on Friday dropped to $47.40 a barrel — the lowest point since February 2005.

New York’s light sweet crude fell to 48.25 dollars -- a level last seen in May 2005.

Oil prices have plunged two-thirds since striking record highs above $147 in July when fears of supply disruptions had helped to send them into orbit.

The fall below $50 reflects an assumption that demand will be affected not only in Western countries but in China and India, whose rapid growth was also a major force pushing prices to record highs earlier this year, said Jason Feer of energy market analysts Argus Media.The market is fully internalising the realisation that the coming recession is going to be pretty significant and is likely to affect demand in some of the emerging countries that have been propping up the market, Feer said.

Analysts said sentiment has been hammered by an unrelenting series of bad economic data in the United States, the world’s biggest energy consumer.

The eurozone is already in recession — defined as two successive quarters of negative economic growth.

The dominant influence remains ... sagging demand, said David Moore, commodity strategist at Commonwealth Bank of Australia.

Our current view is that oil prices may face further downside in the next few weeks. The economic outlook is poor in the coming year, so oil consumption could weaken further ... concerns about slowing consumption will remain prominent, added Moore, quoted by Dow Jones Newswires.

Action should meanwhile be taken to halt the decline in oil prices, Libya’s OPEC representative told AFP on Friday.

Nevertheless, Shukri Ghanem — the head of Libya’s national oil firm and its envoy to the Opec oil cartel — did not explicitly repeat his call for oil production to be cut when the organisation meets in Cairo on November 29.

Ghanem said the group should examine whether the fall in prices was the result of weaker consumption or of speculators liquidating their positions in the market.

The oil market needs some kind of action, he said, adding: Of course the falling price hits our earnings but we’re not worried because it can’t last. We expect a turnaround.

Last month, the Organization of Petroleum Exporting Countries (Opec), which produces 40 per cent of world oil, decided at an emergency meeting to slash its official oil output quota by 1.5 million barrels a day from November 1.

Prices could drop to $43 or $44 before rebounding along with the global economy next year, CFC Seymour Securities said in a report Wednesday.

The London-based Centre for Global Energy Studies (CGES) on Tuesday forecast a contraction in global demand for the first time in 25 years.

By Friday on London’s InterContinental Exchange (ICE), Brent North Sea crude for January had slumped to $47.87 from $55.34 .

On the New York Mercantile Exchange (NYMEX), light sweet crude for January tumbled to $49.47 from $57.58 a week earlier.

PRECIOUS METALS: Gold prices edged higher while silver, platinum and palladium fell.

Gold ... benefited from the return of safe-haven investment demand as investors sought respite from tumbling stock markets, said James Moore, analyst at specialist metals website TheBullionDesk.com.

On the London Bullion Market, gold rose to $774.50 an ounce at Friday’s late fixing from $747.50 a week earlier.

Silver fell to $9.17 an ounce from $9.33 .

On the London Platinum and Palladium Market, platinum slipped to $812 an ounce at the late fixing on Friday from $845 a week earlier.

Palladium slumped to $183 an ounce from $216 .

BASE METALS: Copper and aluminium prices tumbled to their lowest points for more than three years, driven lower by weak demand from US carmakers and mounting concern about a worldwide recession.

The transportation sector makes up between 10 per cent and 25 per cent of base metals demand, said BNP Paribas metals analyst Michael Widmer.

“We calculate that the slowdown of the US automotive industry will reduce the country’s copper and lead demand by 2.0 per cent and 1.5 per cent respectively this year. The picture in Europe is similar.

Copper on Thursday struck $3,330 a ton, while aluminium slumped Friday to $1,770 a ton. Both low points were last seen in July 2005.

The US economy is currently reeling, while the fabled American auto industry is gasping for air, having thus far failed to secure another bailout.

By Friday, copper for delivery in three months had fallen to $3,574 a ton on the London Metal Exchange from $3,815 a week earlier.

Three-month aluminium dived to $1,803 a ton from $1,922. Three-month lead slipped to $1,217 a ton from $1,375 .

Three-month zinc gained to $1,200 a ton from $1,185 .

Three-month tin tumbled to $11,700 a ton from $14,020 .

Three-month nickel dropped to $10,300 a ton from $11,274 .

COCOA: Cocoa futures rose in London and New York as investors focused on supply issues in key producer countries.

Cocoa values continued their ascent ... as supply concerns continued,said Sucden analyst Stephanie Garner.

By Friday on LIFFE, London’s futures exchange, the price of cocoa for delivery in March climbed to 1,509 pounds a ton from 1,357 pounds a week earlier.

On the New York Board of Trade (NYBOT), the December cocoa contract rose to $2,050 a ton from $1,945 .

COFFEE: Coffee prices lost ground.

Coffee came under pressure as a result of the general economic gloom being reflected in the stock markets and other commodities, said Sucden analyst Ralph Hawes.

By Friday on LIFFE, Robusta for delivery in January slipped to $1,805 a ton from $1,817 a week earlier.

On the NYBOT, Arabica for March fell to 111.25 US cents a pound from 115.05 cents.

SUGAR: Sugar prices drifted lower in subdued trade.

By Friday on LIFFE, the price of a ton of white sugar for delivery in March slid to 320.50 pounds from 321.40 pounds the previous week.

On NYBOT, the price of unrefined sugar for March decreased to 11.36 US cents per pound from 11.51 cents.

GRAINS AND SOYA: Grains and soya prices weakened.

At the moment all consideration continues to be focused on the worldwide financial crisis, said analyst Bill Nelson at Doane Advisory services.

Companies and banks were selling their commodities in order to raise capital, thereby dampening the market further, he added.

By Friday on the Chicago Board of Trade, maize for delivery in March fell to $3.71 a bushel from $3.97 the previous week.

January-dated soyabean meal -- used in animal feed dropped to $8.56 $from 8.96.

Wheat for March dipped to $5.33 a bushel from $5.74.---AFP