CRUDE OIL prices yesterday fell to within striking distance of the critical $100 a barrel level, hitting a fresh five-month low as hurricane Ike shifted its course away from the Gulf of Mexico's oil-producing area.
Since jumping to an all-time high of $147.27 last July, the combination of the slowdown in the global economy, which is damping oil demand, and higher production from the Opec oil cartel have brought down oil prices 30 per cent.
West Texas Intermediate crude, the US benchmark, yesterday fell to an intraday low of $103.46 a barrel, its lowest since early April. Traders said a drop back to double-digit oil prices would depend on Ike's final course and Opec's production over the next few months.
The market yesterday was waiting for the end of the cartel's meeting in Vienna which was being held overnight because of the Ramadan fasting. Ahead of the gathering, Saudi oil minister Ali Naimi signalled that he was comfortable with the current supply and demand outlook, making it less likely Opec would formally decide to cut its output.
The strengthening of the dollar against the euro and sterling is providing a cushion to Opec countries. - ( Financial Timesservice)
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