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Crude oil price falls but petrol fails to follow

The price of oil has fallen below $60 a barrel today amid concerns about the state of the worldwide economy and the potential for a further setback in the short to medium term. While many believe that the short-term speculators, who had been blamed for the recent spike in the price of oil, have now left the market for the time being, there is still significant concern as to why the price of petrol has yet to follow.

It seems very much that petrol retailers are quick to jump onto the bandwagon when the price of oil rises although they are never as quick to immediately reflect any falls in the price of oil. It will be interesting to see how petrol retailers across UK justify their current stance as the fall from over $70 a barrel to under $60 a barrel is significant and could, and should, impact upon the worldwide cost of living.

It is interesting to see that the International Energy Agency (IEA) has for some time predicted a fall in demand for oil despite the fact that many speculators believed otherwise. Whether we have seen the realisation that demand for oil will not rise until 2010 or whether speculators have taken a short-term profit very much remains to be seen.

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