Oil falls as Gulf output resumes

Oil prices fell today as oil and gas producers in the Gulf of Mexico restored more output after a mild storm triggered evacuation…

Oil prices fell today as oil and gas producers in the Gulf of Mexico restored more output after a mild storm triggered evacuation and production cuts.

US crude for November delivery fell 48 cents to $81.14 a barrel by earlier this morning to stand nearly $3 below the all-time high set by the October-month contract on Thursday.

London Brent crude shed 45 cents to $78.85 a barrel.

About 45.8 per cent, or 595,000 barrels of daily crude oil production, remained shut in the US Gulf yesterday afternoon after a tropical depression passed without causing damage.

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Some 62.7 per cent of the Gulf's oil production has been shut in due to bad weather, the highest cut from the region since massive hurricanes in 2005 churned through the region.

A string of bullish factors - including falling US crude stocks, worries about inclement weather destroying oil facilities, a half-point cut in key US interest rates and a weak dollar - pushed oil to a record high last week.

The Organization of the Petroleum Exporting Countries said the surge in oil prices will shield its members, some of which peg their currencies to the US dollar, from current dollar weakness, a Saudi newspaper reported.