Oil prices continue to rise

30 January 2008

Crude oil prices continued to edge up on Tuesday as expectations of a further interest rate rise in the US grew.

The Federal Reserve is scheduled to meet on Wednesday amid speculation that it will decide to cut the benchmark interest rate by a further 0.5 percentage points, having implemented a surprise cut of 0.75 percentage points last week.

Any such move would provide support for the struggling US economy and do more to allay fears of a slump in demand for oil products.

Oil prices were also given support by indications that the Organisation of Petroleum Exporting Countries is unlikely to decide to increase output at a meeting on Friday.

The two factors saw US crude for March delivery climb 65 cents to close at $91.64 (£46.09) a barrel and the equivalent Brent crude contract rise 62 cents to settle at $92.00. Heating oil futures gained 1.53 cents to close at $2.5418 a gallon.

Meanwhile, the Met Office has predicted the recent spell of comparatively mild weather is about to end.

It warned that temperatures will drop at the weekend and that there could be up to ten centimetres of snow in Northern Ireland, Scotland, north-west England and north Wales.

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