Oil demand will return, analyst predicts

8 August 2008

Oil prices are likely to hold at around $124 (£64.18) per barrel in the next six months, analysts have warned.

This week prices fell to their lowest level in three months after peaking over $147, but investment firm Alliance Trust has predicted that they will not continue to tumble as consumers may hope.

Global oil and natural resources analyst Angus McPhail has contradicted claims that demand destruction - a permanent shift in consumption habits - has been responsible.

"The body of evidence would suggest that demand has not weakened due to demand destruction but rather because of higher prices and will return once prices fall," he stated.

Mr McPhail added that low global supplies are likely to see costs rise as winter approaches, making this a good time to stock up on home heating oil.

High prices have recently led to an increase in thefts around the country, with police in Cornwall reporting that 500 litres of oil were taken from a house last week.

Click here for home heating oil price trends