Oil falls below $41 in Asia as US company, unemployment data reflect deep recession

Oil prices fell below $41 a barrel on Friday in Asia as soaring U.S. unemployment and bleak corporate results kept investors pessimistic about demand for crude."We’re seeing too much bad news coming out of companies," said Gerard Rigby, an energy analyst with Fuel First Consulting in Sydney. "If companies are still laying off workers, then economic reports are going to be pretty bad going forward.” With millions out of work, investors fear a downward spiral of falling consumer demand and company losses could lead to further job cuts and weakening crude demand reported the Associated Press.

The Dow Jones industrial average rose 1.3 percent Thursday.

Investors are also watching for possible further production cuts by the Organization of Petroleum Exporting Countries, which has already promised to reduce output by 4.2 million barrels since September.

Meanwhile Bloomberg reported Crude oil fell on concern that fuel demand in the U.S., the world’s biggest energy consumer, may decline as a report showed the number of newly jobless climbed to a 26-year high. A release today may show the jobless rate rose to 7.5 percent in January. Oil is poised for a 2 percent drop this week, the smallest weekly change in more than five months. Prices declined 10 percent last week.

Volatility Drops:
Oil prices have remained near the $40 level for the past five trading sessions. The 30-day historical volatility for crude oil has fall to 92.28 percent today, the lowest since Dec. 19, according to data compiled by Bloomberg.