Despite a storm in the Gulf of Mexico that has curtailed oil production, shipping and refining, oil dipped below US$121 a barrel as OPEC increased output and demand from USA and Europe continues to weaken. A survey indicates that OPEC nations, mainly Saudi Arabia, have hiked supply for the third consecutive month in July.
Oil prices plunged to a three-month low, briefly plunging below US$120 a barrel in another huge sell-off after Tropical Storm Edouard seemed less likely to disrupt oil and natural gas output in the Gulf of Mexico. Traders are also anxious that supplies could be disrupted as a result of tension between the West and Iran. Oil supplies from OPEC member Nigeria continue to be hampered as a result of militant attacks that have cut about a fifth of its production.