Petrol prices expected to fall further

Petrol prices are expected to fall further after Hurricane Gustav failed to disrupt output.

Over the last few weeks the price of petrol at the pumps slipped seven cent from €1.36.9 per litre to an average of €1.29.9.

People using oil for domestic heating are also hoping for a fall in prices after oil prices fell from their record of more than US$147 a barrel in July amid evidence that some of the world’s main markets may be heading for a recession.

Oil prices fell in Asian trading this morning as the US government announced the release of oil from its strategic reserve to help with recovery efforts after Hurricane Gustav.

US crude dropped 34 cent to US$109.37 a barrel, while Brent North Sea crude eased 29 cent to US$108.05.

Airlines which have slapped on large fuel surcharges — such as Aer Lingus on long-haul routes to America — will also come under pressure to reduce charges as fuel costs continue to fall.

“Had it not been for the hurricane we would have seen a lower price profile over the last week,” said David Moore of Commonwealth Bank of Australia.

With world economic growth slowing — and many people worried about their job prospects — there is a good chance that consumer spending will slow, limiting demand for crude oil.

However, while the price of oil may be falling, analysts are keen to point out that markets remain volatile.

Earlier this year a number of well-respected Wall Street firms and analysts predicted that oil could climb as high as US$250 a barrel.

Article courtesy of the Evening Echo newspaper.