Oil fell below $109 (Dh400) a barrel on Wednesday, weighed down by slowing demand in the US and other consuming nations and signs that the US oil sector would recover quickly from Hurricane Gustav.
US crude traded down $1.40 to $108.31 a barrel by 1425 GMT (6.25pm UAE time) after settling below its 200-day moving average, a key technical level, for the first time since May 2007 on Tuesday.
London Brent crude fell $1.12 to $107.22 a barrel.
Prices have fallen by $7 from last Friday after Hurricane Gustav proved to be less devastating than feared.
Initial checks on US Gulf of Mexico energy installations showed little damage, and the Louisiana Offshore Oil Port (LOOP) – the nation’s only deepwater port – expects to resume operations in the next few days.
Companies had closed 13 refineries and shut in all of the 1.3 million barrels per day (bpd) of oil production in the Gulf of Mexico and 95.4 per cent of the region’s natural gas output.
Now that the storm has passed, analysts say slowing oil demand in the US and other consumer nations would continue to depress oil prices, which have dropped from a record of $147.27 on July 11.