Oil drops close to US$100 as the dollar strengthens and demand weakens

12-Sep-08
New York's main contract, light sweet crude for October, dropped to close at US$100.87 a barrel, as the dollar strengthens and demand weakens. This has sidelined the prospective effects Hurricane Ike barreling through the rig-dotted Gulf of Mexico. In London, Brent North Sea crude for delivery in October settled at US$97.6- its lowest level since March 5. The Euro below 1.39 dollars for the first time in a year amid growing recession fears in the eurozone. A strong dollar makes dollar-priced goods, such as oil, more expensive for buyers using weaker currencies. On the demand side, the US Department of Energy (DoE) lowered its forecasts for 2009 global crude oil demand. Demand for petroleum products in USA, the world's largest consumer of crude oil, continues to fall and is currently pegged 3.8% below its level a year ago. The International Energy Agency cut its estimate for demand growth this year by 100,000 bpd and for 2009 by 140,000 bpd.
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