Expert predicts further oil price falls

4 December 2008

Crude oil prices are set to continue falling until the end of the year, a market expert has predicted.

Although prices soared to record highs during the summer, fears about a drop in demand for oil products as economies around the world fall into recession have since forced the value of the commodity down to levels not seen for four years.

In early trading on Thursday, Brent crude stood at $44.37 a barrel and US crude at $45.63.

The prices fell despite the US Energy Information Administration's weekly inventory report showing a decline in stocks of crude and distillate, which includes heating oil - a trend which would usually force prices up.

Saxo Capital Markets' head of sales trading Christoffer Moltke-Leth told the Associated Press there is no reason to think prices will rebound in the near future, even if the Opec nations decide to cut output.

"You could see prices testing $40 by the end of the year because the economic data is really ugly at the moment. Demand destruction is still very much the concern," he said.

The slide in global oil prices has been good news for home heating oil customers, who have seen the cost of the fuel fall by almost 40 per cent since July.

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