Crude oil prices fall by nine per cent

28 January 2009

Crude oil prices experienced their biggest drop in almost three weeks on Tuesday as the difficult economic conditions continued to take their toll.

US crude fell $4.15 to settle at $41.58 (£29.19) a barrel - a fall of more than nine per cent.

Meanwhile, London Brent crude closed at $43.73 a barrel as prices dropped by $3.23.

This comes after the market recorded four days of consecutive price increases towards the end of last week, but demand for oil continues to wane on the back of the global financial crisis.

The latest drop may not necessarily result in a reduction in the cost of home heating oil due to the current unfavourable exchange rates in Britain, but the news is still likely to be welcomed by residents.

Furthermore, with the recession showing no signs of letting up, analysts expect the economy to continue to act as a drag on demand.

This means the current Opec supply cuts may not be enough to halt the downward trend in crude oil prices as inventories continue to rise.

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