Oil falls further as dollar strengthens

25 June 2009

Crude oil prices slipped below $69 (£42.17) a barrel on Wednesday, despite a steep drop in US stockpiles.

A report by the Energy Information Administration revealed that inventories in the world's biggest consumer country fell by more than one per cent last week, exceeding most expectations.

However, the figures also showed a sharp rise of almost four million barrels in gasoline and distillate stocks, which helped drag crude prices back down in later trading.

Meanwhile, the US dollar extended gains against the euro and the yen, exerting further downward pressure on the oil market and prompting values to fall below $69 a barrel.

US crude eventually settled down 57 cents at $68.67 a barrel, while London Brent crude slipped 47 cents to close at $68.33 a barrel.

The recent dip in the market could be good news for home heating oil customers, who last week saw prices reach new eight-month highs of around $73 a barrel.

Values are still more than double the level they were at in January, when the price of crude oil stood at less than $33 a barrel.

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