Oil prices fall as Middle East tensions subside

8 July 2008

Worldwide oil prices have eased slightly as tensions in the Middle East have relaxed.

Speculation over the possibility of an attack by Israel on Iran's nuclear programme led to record highs last week, but hints at negotiation have now cooled prices.

The cost of a barrel of light sweet crude oil dropped to $141.37 (£71.50) on Monday, down $3.92.

Analysts at energy consultancy firm John Hall Associates were quoted by the Associated Free Press as saying: "Following the news that Iran may be prepared to compromise on its nuclear development program, oil prices are a little softer."

Lower prices were also attributed to the strengthening of the US dollar.

Despite the ease on the market home heating oil customers can expect to pay high prices in the future, as the International Energy Agency yesterday warned that demand for fuel will see prices continue to rise until at least 2013.