Crude prices continue to fall

9 October 2007

The recent fall in crude oil prices is unlikely to become a long-term trend, according to one market analyst.

US crude continued its fall away from its recent record high by losing $2.20 to close at $79.02 (£38.85) a barrel on Monday, before dropping a further 17 cents during early trading on Tuesday.

Similarly, London Brent crude dropped $2.32 on Monday and a further 22 cents in Tuesday's Asian trading to reach $76.36.

Victor Shum, an energy analyst with Purvin & Gertz told Associated Press that the drop in prices was typical of the period before demand for heating oil reaches its peak during the northern hemisphere winter.

He added: "I think oil market fundamentals remain quite firm in the near term ... It won't be long before traders worry about the low heating oil inventory."

Last week the US Energy Information Administration revealed the country's stock of distillate, which includes heating oil, is 15.6 million barrels lower than 12 months ago.