Michael Galvis: Oil Falls towards $39 A Barrel!

LONDON (Reuters) — Oil fell $2 a barrel towards $39 on Friday after news of more job losses in the United States heightened the prospect for still weaker demand in the world’s biggest oil consumer.

Nearly 600,000 workers lost their jobs in the United States last month – more than Wall Street economists had expected.

The global economic slowdown has curbed demand for fuel around the world, knocking oil prices sharply lower since they peaked at almost $150 in July.

“It gets worse and worse and worse,” said Greg Salvaggio of Tempus Consulting in Washington. “The economy is just falling into oblivion.”

U.S. light crude for March delivery fell $1.93 to $39.24 a barrel by 9:43 a.m. ET.

U.S. crude is trading well below Brent as inventories in Cushing, Oklahoma – the delivery point for the U.S. crude contract – are at record levels. U.S. crude for delivery in two months time is trading just above $44 a barrel.

The head of Italy’s largest oil company predicted on Friday that oil could stay as low as $40 for the rest of 2009.

“A price of $40 a barrel, it’s roughly my forecast for this year,” Eni Chief Executive Paolo Scaroni said.

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