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Oil drops to $102 on NYMEX

11 September 2008 08:53 (UTC +04:00)

Baku. Vugar Mustafayev - APA-Economics. il prices dipped to fresh five-month lows on Wednesday as weak demand and a strong dollar offset a surprise OPEC production cut agreement and back-to-back hurricanes in the Gulf of Mexico that have started cutting deeply into U.S. energy supplies.
U.S. crude fell 68 cents to settle at $102.58 a barrel after dropping as low as $101.36, the lowest since early April. London Brent crude fell $1.37 to $98.97.
Oil prices have dropped about 30 percent since a record high over $147 a barrel in mid-July, hit by concerns over slowing consumption and a rebounding dollar.
Wednesdayâ€™s losses were tempered by news OPEC decided to lower its production ceiling to 28.8 million bpd from earlier targets of 29.67 million bpd.
Analysts said the group was seeking to support the market at around $100 a barrel, though some were skeptical the cartel would follow through on the agreement.
Sources at oil refineries around the world told Reuters this week that OPEC kingpin Saudi Arabia had left its crude supply allocation unchanged for October.
The back-to-back hurricanes were already cutting deeply into U.S. energy inventories with crude oil stocks down 5.9 million barrels last week, according to the Energy Information Administration.
Analysts said the impact of the EIA report was limited as regional data showed crude oil stockpiles along the Gulf Coast actually rose last week in the midst of the nationwide draw -- a sign that the weaker refinery activity was offsetting the loss of offshore crude production.