Oil price rally ends

1 February 2008

The recent rally in the price of crude and heating oil futures came to an end on Thursday amid fears that demand for oil in the US is set to plummet.

A new report showed unemployment in the US is rising, fuelling fears that the economic slowdown could develop into a recession which would almost certainly lead to a fall in demand for oil from industry.

The development came just a day after it emerged that stockpiles of crude oil and petrol in the US increased substantially last week and the two sets of figures put downward pressure on prices.

Heating oil futures lost 1.33 cents to close at $2.5291 (€1.705) a gallon, while US crude slipped 58 cents to settle at $91.75 a barrel and Brent crude dropped 32 cents to finish the day at $92.21.

Meanwhile, the Irish government has announced details of a new profit resource rent tax designed to raise revenue from the country's developing oil and gas production industry.

Welcoming the news, natural resources minister Eamon Ryan said: "Our oil and gas resources belong to the people. It is only right that Irish people benefit significantly from the profits these resources generate."