Prices unaffected by militant threats to US oil

15 February 2007

Oil prices have fallen further today after drops in supplies of domestic heating came in lower than expected.

London Brent crude oil shed 23 cents, falling to $57.20 (£29.22), with US crude dropping 22 cents to $57.78 per barrel.

Despite a decline of around three million barrels of distillate stocks such as domestic heating oil in the US last week, oil prices failed to be buoyed as supplies had been forecast to drop by 4.2 million barrels.

Tim Evans, an energy analyst at Citigroup Global Markets, told the Philadelphia Inquirer: "Nobody is more bearish than a disappointed bull. If the data doesn't fit their view of the market, they don't acknowledge it. Psychologists have a name for this: denial."

In addition, the cost of oil failed to be affected by threats of attack on US oil supplies around the world by the Saudi arm of al-Qaida.

Reuters reports that the militants posted the following on a website: "It is necessary to hit oil interests in all regions which serve the US, not just in the Middle East. The goal is to cut its supplies or reduce them through any means."