Crude Oil Falls to a 14-Week Low

Crude oil fell to a 14-week low on signs that the U.S. economic slump will extend into 2009, crimping fuel demand., Bloomberg 8/11/2008 9:08:58 AM

Oil prices retreated as a Bloomberg News survey showed that the U.S. will grow at an average 0.7 percent annual pace from July through December, half the gain in the first half of the year. Prices rose in early trading as five days of clashes between Russia and Georgia threaten alternative export routes from Azerbaijan, needed because of a pipeline fire.

Crude oil for September delivery fell 95 cents, or 0.8 percent, to $114.25 a barrel at 11:38 a.m. on the New York Mercantile Exchange. Prices are up 60 percent from a year ago. Futures touched $114.04, the lowest since May 2.

The fire on the Turkish stretch of the Baku-Tbilisi-Ceyhan pipeline was extinguished today following an explosion last week. Georgia is a key link in a U.S.-backed southern energy corridor that connects the Caspian Sea region with world markets, bypassing Russia. The Baku-Tbilisi-Ceyhan pipeline ships Azeri Light crude.

Oil tankers collecting cargoes from the Georgian port of Batumi moved farther out into the Black Sea after the town was bombed last night, a local shipping agent said.

Tankers moved as much as 15 miles (24 kilometers) out to sea, Batumi-based Garsevan Jorbenadze, a ship agent at TeRo Co. Ltd. who arranges for ships to dock and load, said by phone today. The nearby oil terminal of Supsa, also on the Black Sea, appears to be operational, with one ship waiting to enter the port, he said.

China's July crude-oil imports fell 7 percent to about 3.25 million barrels a day, the lowest since December, the Beijing- based Customs General Administration of China said in a posting on its Web site today. China is the world's second-biggest oil consumer. The U.S. is the biggest.

Brent crude oil for September settlement fell 97 cents, or 0.9 percent, to $112.36 a barrel on London's ICE Futures Europe exchange. Prices dropped to $112.03 today, the lowest for the futures since May 2.