Oil prices fall as US recession fears grow

22 February 2008

Soaring crude oil prices have been reigned in by fears over the stability of the US economy, according to reports, which may be of interest to consumers of home heating oil.

Record prices of more than $100 (67.4 euros) a barrel fell by 2.7 per cent in the face of further indications the country is entering a recession.

Energy analyst with Purvin & Gertz in Singapore Victor Shum said: "The surge to $100 and beyond earlier this week was overdone.

"It has little to do with oil market fundamentals and so it's not surprising that the oil market has pulled back."

News agency Reuters said there was evidence that the US economy was weak and reported that investment bank Merrill Lynch warned a recession would be similar to that of the 1990s.

Crude prices were also checked by further improvements in crude reserves, which have previously been considered too low.

Concern remains over reserves, with the the International Energy Agency recommending that the Organization of Petroleum Exporting Countries should vote next month to keep output as it is in order to build better reserves, according to Reuters.

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