Oil prices plummet

20 March 2008

Oil prices have dropped following slowing demand, in news which may affect those with home heating oil.

Values are now heading towards $102 (£51.47) a barrel after reaching highs this week of $111.

This is the second day oil prices have slipped, after the Federal Reserve Bank reduced US interest rates by 0.75 per cent earlier this week.

According to Bloomberg, US demand for the commodity has fallen over recent weeks and stands at 3.2 per cent less than demand levels last year.

Head of research at Commodity Warrants Australia Rowan Menzies explained why oil prices are slumping back towards the $100 a barrel mark.

"It's easy to see that demand hasn't been as good this year, the economy is weaker and prices are higher,'' he said.

He added that oil prices had been too high for the lack of demand.

This may be good news for home heating oil users who, according to comparison site BoilerJuice, pay an average of £430 more for fuel each year than gas users.

Click here to view home heating oil price trends.