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London: Oil fell to $114 a barrel yesterday, extending the previous session's steep losses that were prompted by concern over rising supplies and weakening global demand.
Tension between the West and Russia over Georgia and expectations that the Organisation of Petroleum Exporting Countries (Opec), which meets on September 9, would trim production should prices fall further limited the decline.
"I still think crude will re-test $110, but not go much lower than that because of the fear that Opec will lower output were values to dip much below this level," said Nauman Bara-kat of Macquarie Futures USA.
US crude fell 64 cents to $113.95 a barrel by 1445 GMT. On Friday, it fell more than 5.4 per cent, the largest one-day slide since December 27, 2004. Brent crude lost 50 cents to $113.42 yesterday.
Oil has fallen from a record high of $147.27 reached in July on concern that high energy costs are taking a toll on global fuel demand. Prices remain up about 15 per cent so far this year.
Moscow's military intervention in Georgia has disrupted some shipments of Azeri oil through Georgia.
Russia, which began to pull out the bulk of its forces from Georgia last week, said on Saturday its troops would patrol one of Georgia's main Black Sea ports, defying Western demands for a complete pullback.
Comments from Iran supported prices yesterday. The group plans to prevent the falling market trend at its meeting on September 9 in Vienna, Iran's oil minister said.
Venezuela has said Opec should consider cutting oil production at the meeting if it decides that recent price declines constitute a sustained downturn.
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