Crude oil price plummets by $2.19 to $77.43 a barrel

By Wire Reports - 11/7/2009


Oil prices tumbled Friday after the government said the U.S. unemployment rate topped 10 percent for the first time since 1983.

Benchmark crude for December delivery gave up $2.19 to settle at $77.43 a barrel on the New York Mercantile Exchange.

"There's some shock value that comes with double-digit unemployment," said Phil Flynn, an analyst with PFGBest. "It's worse than expected. If the job market isn't strong, then the economy isn't strong."

For most of the year, oil prices shrugged off growing unemployment and steadily climbed above $80 a barrel as investors bet that American energy demand would return with an economic recovery. The weak U.S. dollar also pushed oil higher since crude contracts are priced in dollars, and a drop in U.S. currency gives investors with foreign money more buying power.

But oil hasn't been able to push past $82 a barrel as U.S. oil consumption dropped well below average for this time of year. With millions of people giving up the morning commute, gasoline demand has plunged.




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