Dip in oil prices following US inventories

16 May 2008

Oil prices have fallen back at the end of the week after the US Energy Department reported a higher than predicted rise in natural gas supplies.

The price of oil soared to record highs earlier this week as a result of supply concerns and a weak US dollar.

Home heating oil customers have seen their costs almost double within a year as a result of soaring oil prices.

Prices for New York light sweet crude for June delivery fell back from $126.98 (£65.14) per barrel earlier this week after the US Energy Department revealed that natural gas inventories rose by 93 billion cubic feet last week.

London Brent crude has fallen back to $123.11 a barrel following the US report and a decision by the Paris-based International Energy Agency to reduce its growth forecasts for global oil demand.

However, Asian markets experienced volatility on Thursday as a result of a shutdown of ICE Futures trading caused by a power outage and the expiration of options contracts.