Oil prices slip to lowest in three months

7 August 2008

The price of oil has dropped to its lowest level since May, although international concerns have prevented it from falling as far as analysts suggest it could.

According to Reuters, the cost of a barrel of light crude in the US hit $117.11 (£60.07) yesterday, before settling at $118.58, which marks nearly a $30 drop from the record high of last month.

This week an Energy Information Administration (EIA) report showed that stocks of heating oil and diesel had risen in the US, although petrol supplies fell sharply.

Analyst Phil Flynn of Alaron Trading told the news source: "The EIA data showing big increase in crude stocks are bearish, but the [petrol] numbers showing a much larger than expected draw is certainly bullish."

However, an explosion on a pipeline in Turkey and continuing disruption in Nigeria have prevented the sort of falls that some analysts predicted.

The recent high oil prices have prompted an increase in diesel and home heating oil thefts, with insurer NFU Mutual last month stating that red diesel thefts had risen by 30 per cent this year.

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