Oil tumbles from record high

20 February 2008

Home heating oil prices fell again this week after a sharp spike in prices to over $100 (£50) a barrel.

While some analysts suggest Organization of Petroleum Exporting Countries' (Opec's) possible refusal to increase production could have contributed to the sudden increase, others say more solid US stockpiles have eased pressure.

There was also an explosion at a Texan refinery owned by Alon USA that could have caused some concern over production.

However there has been increased concern among traders that global oil supplies might not be able to cope with demand.

David Moore, Commonwealth Bank commodity strategist, said: "The oil price continues to be supported by concerns over oil supply.

"There is speculation that Opec will either leave oil production levels unchanged, or, possibly, even reduce production following the March 5th Opec meeting."

The industry is also watching Exxon Mobil's (EM) case against the Venezuelan government, which is attempting to nationalise an oil project.

EM has so far persuaded several courts to freeze $12 billion in the country's oil assets, according to Associated Press.

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