NEW YORK - Oil fell 2 per cent on Saturday to below US$88 a barrel, resuming a steep slide spurred by rising worries about the health of the US economy.
Oil prices have dropped about 12 per cent since the record US$99.29 hit on November 21 in extremely
volatile activity as dealers weigh an uncertain demand outlook against tight stockpiles.
US crude settled down US$1.95 at US$88.28 a barrel, after touching a low of US$87.07, erasing Friday's US$2.74 gain.
London Brent traded down US$1.54 to US$88.64 a barrel.
Better-than-expected jobs data out of the United States took some of the gloom off the economic landscape, but dampened hopes for a sharp rate cut by the Federal Reserve this week.
Dollar-denominated commodities typically weaken when the dollar strengthens against other curren-cies.
The United States has been struggling with a housing crisis that some economists say threatens to trigger a recession and hurt oil demand growth.
US President George W. Bush on Friday unveiled a plan to bail out troubled homeowners by freezing rate increases on adjustable-rate sub-prime mortgages for five years.
Opec ministers this week declined to boost output in the face of requests for more oil from the United States and other consumer nations, saying the markets are well supplied.
Some energy experts have said Opec's output levels are not enough to stem sliding crude inventories and could trigger a crunch when heating demand peaks this winter.
- Reuters
