4 Sep 2008

Oil price slips as demand eases

9:05 am on 4 September 2008

Oil prices dipped to below $US109 a barrel on Wednesday, weighed down by slowing demand in the United States and other consuming nations.

US crude traded down 36 US cents to settle at $US109.35 a barrel by 1700 GMT.

London Brent fell 28 US cents to $US108.06.

Prices have fallen by more than $US6 since Friday after Hurricane Gustav proved to be less devastating than feared.

Initial checks on US energy installations in the Gulf of Mexico showed little damage, and the Louisiana Offshore Oil Port -- the nation's only deepwater port -- was expected to resume operations in the next couple of days.

Companies closed 14 refineries and shut in all of the 1.3 million barrels per day of oil production in the Gulf at the peak of the storm's impact Monday. But by Wednesday two refineries had restarted and some offshore production was trickling back online.

Now that the storm has passed, analysts said, slowing oil demand in the United States and other consumer nations would continue to depress oil prices, which have dropped from a record of $US147.27 set on 11 July.