MercoPress. South Atlantic News Agency

Oil prices fall to five-month low

Oil prices fell to a five-month low yesterday, dipping below US$68 a barrel amid easing gasoline demand at the end of summer and growing doubts among some traders that Iran will pull supplies off the market.

In the past month, crude-oil futures have declined by roughly 12 percent.

Analysts expect OPEC, which meets next week, to maintain its official output target of 28 million barrels per day. And they said if the cartel trims production in an attempt to prop up prices, the strategy could backfire because it would signal to a market that has worried for several years about tight supplies that the world finally has oil to spare.

Tropical Storm Florence formed far out in the open Atlantic and could strengthen into a hurricane by the weekend, but forecasters said Wednesday it was too soon to tell if it would reach the United States. A more subdued forecast for this year's Atlantic hurricane season has contributed to a recent tumble in energy prices.

Further easing supply concerns, Shell Exploration & Production Co., a unit of Royal Dutch Shell PLC, said its Mars platform in the Gulf of Mexico, which was heavily damaged by Hurricane Katrina, is now pumping 190,000 barrels of oil equivalent per day, or 20 percent more than before last summer's storm.

Light, sweet crude for October delivery fell US$1.10 to settle at US$67.50 a barrel on the New York Mercantile Exchange ? the lowest closing price for front-month futures since April 7.

Brent crude for October delivery dropped US$1.16 to settle at US$66.93 a barrel on the ICE Futures exchange in London.

Oil broker Tom Bentz of BNP Paribas Commodity Futures said the recent downward momentum in oil prices is driving speculators out of the market. ??This is a much-needed correction in prices,'' said Bentz.

Traders are keeping an eye on Iran's diplomatic standoff with the West over Tehran's nuclear program, though some said they are less worried about an imminent impact on oil markets as the process drags on.