Oil Settles Below $129, Now Down 13% From Peak
Oil fell to below $129 a barrel Friday, extending a slide that has knocked nearly 13 percent off last week's record peak on easing tension between Iran and the West and growing demand concerns.
Oil's losses this week are the steepest in dollar terms since futures began trading in New York in 1983 and the steepest in percentage terms since December 2004.
U.S. light crude settled down 41 cents, or 0.32 percent, at $128.88 a barrel, way off its July 11 record high of $147.27.
London Brent crude was also lower.
Growing concerns about the health of the U.S. economy due to the housing crisis and rising fuel costs have pressured prices this week, sending crude down from last Friday's all-time high over $147 a barrel.
Oil demand in the world's top consumer has slipped this summer compared with last year, as Americans scale back holiday travel plans.
Further downward pressure came from the easing of the tensions between the West and OPEC member Iran that have helped support prices this month.
The United States plans to send an envoy to Geneva to join nuclear talks with Iran on Saturday to underline its commitment to a diplomatic solution to the impasse over Tehran's nuclear program.
Iranian Foreign Minister Manouchehr Mottaki said Friday he saw almost no possibility of Israel or the United States attacking his country over the program, which has raised concerns of a potential Iranian oil supply disruption.
"I think we are still caught in this downward trend that we started this week, really nothing has turned it around," said Tom Bentz, BNP Paribas Commodity Futures, noting traders were keeping an eye on a weather system in the Caribbean. "There's not a very clear picture whether it will develop or not."
Oil prices had risen earlier on threats the developing weather system could hit the Gulf of Mexico, which contains a high concentration of oil and natural gas facilities, in about five days, according to weather models.
The low-pressure system, currently northwest of Aruba, was showing high potential for strengthening into a tropical depression.
A five-day national oil workers strike that had limited effect on output from Brazil's state-run energy company Petrobras will end at midnight Friday, but more walkouts loom on the horizon.
Workers will meet July 25 to discuss their next move.
Local residents blew up a Nigerian oil pipeline operated by Italy's Eni in the restive Niger Delta, cutting output further in the world's eighth largest oil exporter.
Attacks by militants in the OPEC nation have helped support gains that have added 30 percent to crude prices this year.
Rising demand from emerging economies in Asia helped send oil on a six-year rally that has sent prices up sixfold.