Surging oil prices dampened by rate cuts

20 March 2008

The continued march of high oil prices has been halted slightly following the latest round of rate cuts by the US Federal Reserve.

Interest rates in the US now stand at 2.25 per cent after being trimmed 0.75 per cent by the Fed.

Oil prices hovered around the $107 (£69.15) a barrel mark following the record-breaking levels reached on Monday, after a week of surging values.

Helen Henton, head of commodity research at Standard Chartered, told Bloomberg that there is a chance oil prices may dip further.

She stated: "Bearish data today could be pivotal in bringing prices lower.

"Stock data over the past six weeks has shown how weak demand has become and how buoyant supplies are."

Oil prices are 93 per cent higher than they were 12 months ago, Bloomberg found.

Price comparison site BoilerJuice said recently that home heating oil users are paying £430 more a year for their fuel than gas customers.

Click here to view home heating oil price trends.