Fed cuts ease oil price hikes

19 March 2008

Despite an initial climb in oil prices after the Federal Reserve cut US interest rates yesterday, values have since dipped.

Oil prices hovered around the $107 (£53.80) a barrel mark as the rate cut eased the hikes in values the commodity has recorded recently. On Monday a record high of over $111 a barrel was reached.

The US base rate now stands at 2.25 per cent following a 0.75 per cent reduction yesterday.

Head of commodity research at Standard Chartered Helen Henton told Bloomberg that prices could come down further, in news which may affect home heating oil users.

"Bearish data today could be pivotal in bringing prices lower," she said.

"Stock data over the past six weeks has shown how weak demand has become and how buoyant supplies are."

The news source states that oil prices are now 93 per cent higher than they were a year ago, which echoes news from price comparison site BoilerJuice stating that home heating oil customers are paying £430 more a year for fuel than gas or electricity users.

Click here to view home heating oil price trends.