Oil drops $6 on easing storm worry, dollar

LONDON - Oil tumbled to below $136 on Tuesday, dropping by about $10 this week, as the dollar gained and concern eased over an Atlantic hurricane.

By (Reuters)

Published: Wed 9 Jul 2008, 12:00 AM

Last updated: Sun 5 Apr 2015, 12:48 PM

U.S. light crude fell more than $6 to as low as $135.14 a barrel, the lowest since June 26. It traded $5.21 lower at $136.16 by 1653 GMT. London Brent crude fell $5.37 to $136.50.

Oil had hit a record $145.85 last week, propelled by tensions between Iran and the West over Tehran's nuclear ambitions and worries a brewing storm could hit the Gulf of Mexico's offshore oil fields.

Hurricane Bertha became a "major" hurricane on Monday, but none of the computer models used to predict storm tracks indicated it would steer toward the Gulf of Mexico.

"It seems the tone is easing for now and the hurricane (concern) is gone," a broker said.

Dealers added the gain in the U.S. dollar triggered some technical selling,

The dollar rebounded from earlier losses on Tuesday after Federal Reserve Chairman Ben Bernanke said the U.S. central bank may keep an emergency lending facility open beyond the end of the year for big Wall Street firms.

But analysts said the market focus would shift later this week to U.S. weekly oil statistics and a monthly report from the International Energy Agency (IEA), which will give a fresh look at the demand-supply situation amid a slowing world economy.

"We have U.S. weekly stats tomorrow and the IEA report comes up a day after," said Mike Wittner, the head of oil research with Societe Generale.

The weekly U.S. oil inventory data, which will include gasoline demand during the long weekend for the July 4 Independence Day holiday, will be released on Wednesday.

A Reuters preliminary poll shows analysts expect a 1.5-million-barrel decline in crude stocks, a rise of 200,000 barrels in gasoline supplies and an increase of 1.8 million barrels in distillates.

Refining margins, or profit levels for oil refiners from producing products, have weakened recently as prices of fuels such as gasoline and gas oil have not kept up with the sharp rise in crude oil prices.

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