Nov 21. In global petroleum market headlines, oil prices dipped to a 3-year low below USD 49 a barrel Friday in Asia as plunging stock markets, driven down by more bad US economic news, battered investor confidence. Light, sweet crude for January delivery was down 95 cents to USD 48.47 a barrel in electronic trading on NYMEX by midday in Singapore. The December contract, which expired Thursday, fell overnight by USD 4.00 to settle at USD 49.62 after sliding to USD 48.50, the lowest level since May 18, 2005. In London, December Brent crude fell 68 cents to USD 47.40 on the ICE Futures exchange. Traders are concerned that a global recession will undermine energy demand. Already, oil prices have tumbled by two-thirds from their peak of nearly USD 150 a barrel in mid-July. The Dow Jones industrial average fell 5.6% Thursday to its lowest level since March 2003 after the Labor Department said new applications for jobless benefits exceeded the consensus forecast and rose to the highest level of claims since July 1992. The number of new applications for jobless benefits exceeded estimates of Wall Street economists, rising to a seasonally adjusted 542,000 from a downwardly revised figure of 515,000 in the previous week, vs. the consensus forecast of 505,000. In addition, the number of people continuing to claim unemployment insurance rose sharply for the third straight week to more than 4 mn, the highest reading since December 1982, when the economy was in the throes of recession. The S&P 500 index tumbled 6.7% Thursday to an 11-year low. The S&P 500 has fallen more than 52% below its October 2007 record, making this the second-biggest bear market on record, exceeded only by the drop between 1930 and 1932. Asian stock markets followed their US counterparts down Friday, but they pared losses as trading progressed. Japan's benchmark Nikkei index was down 1.2 %, Hong Kong's Hang Seng index was down 1.4%. South Korea's key index was up 0.4%. OPEC, which accounts for about 40% of global supply, may cut production before its next official meeting on December 17. The cartel’s President Chakib Khelil has signaled the group may announce output reductions at the meeting, but some members, such as Iran, have called for earlier cuts. The cartel lowered production quotas by 1.5 mn barrels a day last month. The cartel’s revenues have dropped so much, we think OPEC will have to call an extraordinary meeting and cut quotas to try to support the market, although the last cut had zero impact on the market. Moving forward, we can see the market is locked into a totally bearish downward spiral, being driven by negativity on the stock market. After breaking through the critical USD 50/bbl support level, it is now hard to put a bottom on the price of crude, although many analysts are now predicting it could sink as low as USD 40-45. But with global capital markets in freefall, all bets are off at this point.