Oil prices fall for second straight day

27 August 2009

Crude oil prices fell for the second consecutive day on Wednesday after an increase in US inventories sparked fresh concerns over future energy demand.

A report by the country's energy department showed stockpiles jumped by some 200,000 barrels during the week ending August 21st.

This defied predictions by many analysts that supplies would drop, casting doubt over the strength of future fuel demand and putting downward pressure on the oil market.

As a result, Tuesday's losses of three per cent were extended further as prices dropped below $72 (£44.43) a barrel, with US crude settling down 62 cents at $71.43.

London Brent crude also fell 17 cents to end at $71.65, while heating oil closed at $1.852 a gallon after falling less than a penny.

The current dip in the market comes after prices climbed by as much as ten per cent over the past week, with values touching $75 in early trading on Tuesday.

According to Reuters, Venezuelan oil minister Rafael Ramirez expects crude oil to average around $70 a barrel by the end 2009, with levels of $75 possible in the final quarter.

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