Oil prices fall as the gloomy outlook for the global economy outweighs tensions in the Middle East due to Israeli air strikes on Gaza. US light crude dropped $1.20 to $38.82 a barrel on Tuesday and London Brent crude was down 99 cents at $39.66 a barrel.
Oil prices climbed over $40 a barrel on Monday after Israel began its fiercest air operations against the Gaza strip in 60 years.
The attacks have left at least 385 people killed and 1,800 others wounded, Palestinian medical sources told Press TV. According to UN officials, 57 civilians, including women and children, are among the victims.
The price of oil has dropped by more than $100 (60 percent) since hitting a record high of above $147 a barrel in July, its biggest annual fall since futures began trading 25 years ago.
The Organization of the Petroleum Exporting Countries (OPEC), which produces about 40 percent of the world's crude, agreed in December to cut output by a record 2.2 million barrels per day (bpd) to prevent oil prices from falling further.
OPEC oil output, excluding Iraq and Indonesia, is expected to fall by 400,000 bpd in December as members have complied with the new reduced quotas assigned to them, said consultant Petrologistics.
OPEC President Chakib Khelil said last week that the group might decide in mid-January to hold an extraordinary meeting before March if oil prices continue their downward spiral.
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Topic: Oil falls on gloomy economic outlook (Read 376 times)