LONDON, Dec 20: Oil prices fell this week to their lowest levels since 2004, despite a record Opec output cut, while many commodities were dragged lower on fears of a looming global recession and weak demand.

“Commodity markets have fallen back sharply under the weight of a rapidly deteriorating outlook for global growth, said Barclays Capital analysts in a research note to clients.

Thin trading conditions have exacerbated the downfall, pushing implied volatility in many markets to all-time highs. However, some raw materials won modest support from the weak dollar, which fell after the US Federal Reserve slashed interest rates to virtually zero in an attempt to boost a struggling economy.

A weak greenback normally lifts the price of dollar-priced commodities because it encourages buyers using stronger currencies.

OIL:

New York crude oil hit a low point of $33.44 per barrel in New York, which was a staggering 77 per cent beneath the record high $147.27 per barrel that was forged in July.

A record oil output cut by the Opec crude producers’ cartel failed to stop the slide to a 4.5-year trough that was last seen on April 2, 2004.

Crude fell as concerns over a global economic slowdown weighed on sentiment, said Sucden analyst Nimit Khamar.

New York’s January contract was also driven lower in technical trade due to its expiry on Friday.

The fresh falls prompted Opec President Chakib Khelil to stress that the cartel would continue cutting output until prices stabilise.

We will continue this reduction until the price will stabilise, Khelil told reporters in London on Friday at a key gathering of major oil producing and consuming nations.

The 13-nation Organization of the Petroleum Exporting Countries (Opec), which produces some 40 per cent of the world’s crude, agreed Wednesday to cut output by 2.2 million barrels a day in a bid to shore up the market and protect its revenues.

But stubborn demand concerns refused to go away despite news of the historic production cut at an Opec meeting in Oran, Algeria.

The global recession continues to sap demand, said BetOnMarkets analyst David Evans.

The market also plunged lower as many traders doubted whether all members of the 13-nation Opec cartel would fully enforce the reduction.

The prices today would have been very very low, so I think we did have an impact although we did not succeed in stabilising, he said.

The market plunged also lower as many traders questioned whether all members of the 13-nation Opec cartel would fully enforce the reduction.

Saudi Arabian oil minister Ali al-Nuaimi again indicated he thought $75 per barrel would be “fair and reasonable, adding that anything lower could lead to more, not less, instability.

When oil is priced lower, such as it is now, there will be less investment and less future supply, he said in London.

Eventually, this scenario is followed by a surge in prices, as supplies will not be sufficient to meet growth in consumption levels.

In Oran meanwhile, Opec also looked to non-member oil producers Russia and Azerbaijan to make reductions of their own. The pair said they were each ready to cut their own oil production by about 300,000 barrels a day.

Combined with these possible cuts, the world’s biggest oil producers could eventually take about 2.8 million barrels a day off the oil market -- about 3.0 per cent of current global production.

By Friday on the New York Mercantile Exchange (NYMEX), light sweet crude for delivery in January tumbled to $36.91 from $44.51.

On London’s InterContinental Exchange (ICE), Brent North Sea crude for February was steady at $44.67 , from $44.49 a week earlier when January was the most traded contract.

PRECIOUS METALS:

The prices of gold, silver, platinum and palladium fell. On the London Bullion Market, gold rose to $835.75 an ounce at Friday’s late fixing from $826.50 a week earlier.

Silver increased to $10.61 an ounce from $10.07.

On the London Platinum and Palladium Market, platinum gained to $848 an ounce at the late fixing on Friday from$801 a week earlier.

Palladium climbed to $176 an ounce from $172.

BASE METALS:

Base metals prices hit a variety of multi-year low points as trade was dampened by concerns about the slowing global economy.

Industrial metals remain under pressure from a weak demand outlook amid global recession and chronic oversupply, evidenced by rapidly rising inventories, said Calyon analyst Robin Bhar.