Oil drops as paper money firms against commodities

Standing left to right – Mr. Dinesh Jebamani (Chief Manager Liability Product Management and New Age Media – Seylan Bank), Mr.Sudesh Peiris (Senior Manager – Digital Banking Channels – Seylan Bank), Ms. S.Senevirathne (Representative of the Revenue Department – Western Province), Mr. Tilan Wijeyesekera (Deputy General Manager – Retail Banking – Seylan Bank) and Mr. Malik Wickremanayaka (Deputy General Manager – Operations – Seylan Bank)

NEW YORK, September 11, 2008 (AFP) – Oil prices tumbled Thursday as the dollar rallied and demand worries outweighed a powerful Hurricane Ike barreling through the rig-dotted Gulf of Mexico. New York’s main contract, light sweet crude for October, slid 1.71 dollars to close at 100.87 dollars a barrel.

The New York contract fell to 100.10 dollars in intraday trade, approaching the 100-dollar threshold it had last crossed on April 1.

In London, Brent North Sea crude for delivery in October dropped 1.33 dollars to settle at 97.64 dollars a barrel on Thursday — its lowest level since March 5.

“Contracting demand and a strengthening greenback dominated participants’ concerns for another day,” said John Kilduff, analyst at MF Global.

The dollar strengthened again against the euro, which fell 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.

The market had a series of reports this week underlining weakening demand.

The US Department of Energy (DoE) on Tuesday lowered its forecasts for 2009 global crude oil demand