Oil fell below $120 per barrel today to touch a three-month low as Tropical Storm Edouard hit the Texas coast without causing any major disruptions to US energy operations.
US crude settled down $2.24 to $119.17 a barrel after tumbling to $118.00 earlier, the lowest price since May 5th. London Brent crude lost $2.98 to settle at $117.70.
Edouard, the fifth tropical storm of the 2008 Atlantic hurricane season, came ashore at the McFaddin National Wildlife Refuge halfway between High Island and Sabine Pass.
The storm caused only minor oil and natural gas outages as it passed through the Gulf of Mexico, and companies began to fly evacuated staff back to rigs.
About 6 per cent of Gulf of Mexico crude oil and 12.3 per cent of natural gas production was shut in by the storm, the US Minerals Management Service said.
Yesterday's losses came after Reuters survey showed Opec oil supply rose for a third consecutive month in July mainly because of increased output from the world's top exporter Saudi Arabia.
The boost in production from Opec, source of two in every five barrels, coincides with soaring energy prices and an economic slowdown that has eroded consumption in the United States and Europe.