Oil prices fall to almost $108 after Gustav damage fears subside

London: Oil prices dipped to near US$108 a barrel on Wednesday as the dollar continued to strengthen and attention shifted to concerns over slowing global demand for crude after Hurricane Gustav left oil installations in the Gulf of Mexico region largely undamaged.

By midday in Europe, light, sweet crude for October delivery was down US$1.50 to US$108.21 a barrel in electronic trading on the New York Mercantile Exchange.

On Tuesday, the contract settled at US$109.71 a barrel, down US$5.75 from the close of trading Friday, before the Labor Day weekend.

U.S. floor trading was closed Monday. At
one point Tuesday, it fell as low as US$105.46, its lowest
level since April.

In London, October Brent crude fell 65 cents to US$107.69
a barrel on the ICE Futures exchange.

Since oil prices reached a record US$147.27 on July 11,
sentiment among traders has shifted to expect slowing
economic growth in the U.S., Europe and Japan will likely
spread to developing countries and undermine crude demand.