Crude down another $3

20/01/2009

Crude prices have continued to fall this morning (January 20th), with contracts in New York shedding ten per cent of their value as the Russia-Ukraine gas dispute came to an end.

On the New York Mercantile Exchange, light, sweet crude for February delivery dropped to $32.70 (£23.40) a barrel, down more than three dollars.

The falls came as Ukraine and Russia signed an agreement to re-establish gas flows to continental Europe, where supplies have been disrupted for more than a week.

When the gas was shut off on January 1st, crude prices rose as investors grew concerned about supply.

Meanwhile, heating oil prices also rose earlier this month, tracking crude prices.

However, oil has since retreated below $40 a barrel, with many analysts predicting that it could fall further.

"You still have potential for it to drop below $30," commented Jeff Currie, head of the Goldman Sach's commodities research team, speaking to Reuters.