Oil prices tumble

16 July 2008

Oil prices have dropped by $6 (£2.99) - the largest fall in one day for 17 years.

In news that could benefit home heating oil users, a barrel of the commodity slipped by $6.44 or 4.4 per cent on Tuesday.

This is the biggest fall since 1991 when oil prices were over $100 cheaper than today's prices.

Yesterday, values for a barrel of oil steadied at just under $140 a barrel a mark after the fall, finishing on $138.74.

It is thought that a weakening US economy means demand for oil is falling, causing oil prices to slip.

According to James Ritterbusch, president of Ritterbusch & Associates, there is still a danger of real economic slowdown to the point of recession.

"We're getting to the point where the market's looking at an increasing likelihood of a deep recession," he told Bloomberg.

Yesterday, Iran warned that oil prices could rise if its nuclear plans are restricted.

Click here for home heating oil price trends.