Business | Oil & Gas

Crude drops more than $2 to lowest in seven weeks

Oil hit a seven-week low on Friday, extending a decline that has knocked more than $20 off prices in two weeks.

  • Reuters
  • Published: 23:41 July 25, 2008
  • Gulf News

London: Oil hit a seven-week low on Friday, extending a decline that has knocked more than $20 off prices in two weeks.

US crude was $2.09 lower at $123.40 by 1515GMT and traded as low as $122.50, the lowest since June 5. Brent crude lost $2.05 to $124.39.

Concern that high prices and the slowing US economy will undermine demand have helped oil fall from a record $147.27 on July 11. Technical trading and a short-covering bounce had buoyed prices earlier.

"Potentially, there are some people selling off after a weak bounce," said Harry Tchilinguirian, oil analyst at BNP Paribas.

Oil also fell as the dollar gained against the euro and the yen. Dollar weakness has boosted demand from some investors for oil and strength in the dollar has been a reason to sell crude. Some analysts said oil could be headed lower still.

Forecast

Lehman Brothers forecasts that oil has peaked and may fall to $90 by the end of the first quarter of 2009. Jim Ritterbusch of Ritterbusch & Associates said crude could drop to as low as $117 within about a week.

Also pressuring oil, Opec is expected to raise supply in July by 200,000 barrels per day, according to Petrologistics, a consultant.

Russia has slashed its August oil export plan as oil firms rushed to re-route volumes to domestic refineries, a preliminary export schedule showed.

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