Commodity Daily News

Oil Extends Losses on Easing Geopolitical Tensions in Georgia.

Crude Oil prices in the US stayed below $120 per barrel on Friday. Earlier last week, the bulls came back with a vengeance in the Oil market as Crude prices closed above $121 a barrel on Thursday for the first time in 2 weeks.

However on last Friday, Crude prices declined in New York posting the biggest single-day drop in dollar terms since Jan. 17, 1991, when U.S.-led forces expelled Iraq from Kuwait. Oil's sharp fall on Friday was also prompted by reports that showed an uptick in OPEC Crude Oil output and another showing an expected decline in U.S. travel over the Sept. 1 Labor Day holiday weekend as high fuel prices hit consumers. Light Crude also deepened losses yesterday, hovering just above $114 a barrel, on diminishing supply concerns as Tropical Storm Fay crossed over land and on easing geopolitical tensions as Russia withdrew the bulk of its troops from Georgia.

Analysts estimate that the market would also keep a close watch on the U.S. dollar, after its surge on Friday also helped push oil prices lower. A rising dollar encourages selling from investors who bought Crude Oil and other commodities as a hedge against inflation and weakness in the U.S. currency.