Oil prices slip below $50 on flu fears

29 April 2009

Oil prices fell for a second straight day on Tuesday to settle below $50 (£34) a barrel, as the swine flu pandemic continued to spread across the globe.

The virus, which has now killed more than 150 people in Mexico, has spread to countries including the US, New Zealand and the UK, with fears the outbreak could slow the global economy.

With many people also likely to cancel their travel plans for fear of contracting the virus, analysts have warned that demand for jet fuel may slump in a similar fashion to that seen during the 2003 SARS epidemic.

As a result, US crude extended Monday's 2.7 per cent loss, falling 22 cents to settle at $49.92. London Brent crude closed at $49.99 after falling 33 cents.

The US Energy Information Administration's weekly inventory report, set to be released today, is also expected to show a further build up of crude stockpiles.

This could be good news for some residents, however, as it may result in a further drop in crude prices which could translate into lower home heating oil costs.

Click here for a home heating oil quote.