Crude oil prices down nearly 4 per cent

23 June 2009

The price of crude oil slumped to less than $67 (£41.10) a barrel on Monday as the World Bank raised doubts over the likelihood of any potential economic recovery in the near future.

US crude for July delivery fell by $2.62, or 3.8 per cent, to settle at $66.93 a barrel - its lowest point for more than two weeks. London Brent crude also traded down $2.21 to close at $66.98.

The losses came on the back of a World Bank report which dashed hopes of a quick economic turnaround by lowering its global outlook and cutting growth forecasts for most countries.

Oil was also hit by the strengthening of the US dollar against the euro, reducing the appeal of commodities to investors.

The drop in prices will be welcomed by home heating oil customers, who have seen the recent price rally stall over the past week as values hovered around $70 a barrel.

According to Neil McMahon of Bernstein Research, some of the drivers for that rally now appear to have "played out for the time being", meaning prices may fall again in the coming months.

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