Oil falls below $54 as US demand worsens

11-28-2008 | AP

OPEC is planning to cut production and the U.S. outlook continues to be bad

Panama Star By midday in Europe, light, sweet crude for January delivery was down $1.19 to $53.25 a barrel in electronic trading on the New York Mercantile Exchange.

Markets in the United States are closed Thursday for the Thanksgiving holiday, but electronic trading on the Nymex continues.

The dollar's weakening against other major currencies helped the Nymex contract recover from a low of $52.62 earlier in the session. Investors tend to increase their holdings in commodities like oil when the dollar falls and as a hedge against inflation.

In London, January Brent crude fell 65 cents to $53.27 on the ICE Futures exchange.

Prices have hovered just above three-year lows this week as bad economic news painted a bleak picture of U.S. demand for crude. Orders to U.S. factories for manufactured goods plunged.