Oil falls as Gustav threat lessens

2 September 2008

US crude oil fell to just under $108 per barrel this morning, as hurricane Gustav failed to cause significant damage to energy facilities in the Gulf of Mexico.

This represents a fall of over $7.50 from close of play on Friday, when it was widely expected that the refineries - along with the city of New Orleans - were under threat from the tropical storm.

A low of $105.46 was even reached at one point in today's trading - the cheapest price since early April.

The ongoing slide in oil prices has recently been arrested by the Russia/Georgia conflict, as well as concerns over Gustav.

Speaking to Reuters, Mike Wittner at French bank Societe Generale suggested that oil had further to fall - after approaching a high of almost $150 a barrel earlier this year.

"If it were not for these threats, we would have been testing $100 already," he said.

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