Oil Prices Drop To $49 A Barrel

Starting off the post-holiday week, oil plunged more than 9% to a shockingly low $49 a barrel, after OPEC deferred a decision on new supply cuts at a recent meeting. The producer group delayed a decision on output until later this month as Saudi Arabia and other Gulf members called for greater compliance with existing cuts agreed to since September to help stem oil's fall from highs over $147 a barrel struck in July, Reuters reports.

U.S. crude settled down $5.15 at $49.28 a barrel, the lowest settlement since May 2005. Surging demand from emerging economies sent oil and other commodities on a six-year rally, but prices have tumbled since July as the economic crisis erodes demand in the U.S. and other big developed consumer nations.

Federal Reserve Chairman Ben Bernanke warned that the U.S. economy remains under considerable strain and said policy- makers must be ready to take decisive action to protect jobs and growth. ❖