Oil prices dipped to just above $108 a barrel today after Hurricane Gustav left oil installations in the Gulf of Mexico largely undamaged. By midday in Europe, light, sweet crude for October delivery was down $1.50 on the New York Mercantile Exchange as the dollar continued to strengthen and attention shifted to slowing global demand for crude. At one point yesterday, it fell as low as $105.46, its lowest level since April.
Since oil prices reached a record $147.27 on July 11, traders have switched gears, expecting slowing economic growth in the US, Europe and Japan to undermine crude demand. "Had it not been for the hurricane," says one analyst, "we would have seen a lower price profile over the last week." Virtually all oil and natural gas production remains shut down in the Gulf of Mexico, but oil companies are prepared to redeploy evacuated workers as early as today.