Crude oil prices plunged briefly below $119 a barrel this evening for the first time in three months as Tropical Storm Edouard was set to spare energy facilities in the Gulf of Mexico.
Prices slumped by over $5 a barrel in London and New York, also pushed down by a government survey that revealed US consumer spending had cooled in June and inflationary pressures accelerated.
The weak US economy is causing a drop in demand for energy in the United States, the world's biggest consumer of energy.
The price of Brent North Sea crude oil hit as low as $118.80 a barrel in electronic deals, a level last reached on May 5. New York's light sweet crude slid to an intra-day trough of $119.50.
Brent crude later stood at $120.63 a barrel, down $3.55 from Friday's close. New York's main contract, light sweet crude for September, was at $121.02 a barrel, a loss of $4.08.
Tropical Storm Edouard was expected to be very near the southwestern coast of Louisiana and the upper Texas coast by late tomorrow, but oil installations were expected to avoid damage.
Nevertheless, Anglo-Dutch energy group Royal Dutch Shell said today that it would begin to evacuate about 40 staff from the Gulf of Mexico.
