Oil prices fall below $122

LONDON  - Oil prices fell slightly on Wednesday after a brief rally to stand below 122 dollars a barrel as the market awaited weekly data on the health of energy inventories in the United States. Ahead of the data, traders digested news that Libya had resumed deliveries of oil to Switzerland that had been cut off last Thursday over a diplomatic row between the two countries. New York's main contract, light sweet crude for September delivery, shed 54 cents to 121.65 dollars a barrel in electronic deals. Brent North Sea crude for September dropped 45 cents to 122.26 dollars a barrel. "Oil futures were a little lower, consolidating after losses yesterday (Tuesday) and ahead of the weekly US fuel inventories report," said Sucden analyst Andrey Kryuchenkov. Oil prices had tumbled on Tuesday, partly owing to market concerns about weakening demand in the United States, the world's largest consumer of energy, traders said. Brent crude closed down more than three dollars, leaving it about 25 dollars below its record high of $147.50 reached on July 11. The fall is "gigantic in dollar terms," Victor Shum of Purvin and Gertz international energy consultancy said on Wednesday. He added that a stronger dollar and worries about slackening oil demand in the United States were behind the sharp decline in prices. A stronger US unit makes dollar-priced crude oil more expensive for buyers holding weaker currencies. The US Department of Energy was meanwhile to release its weekly report on energy stockpiles in the country at 1430 GMT. "I think the inventory data will continue to show a demand slowdown in the US," Shum said. The head of the Swiss Petroleum Association said Libya had resumed oil deliveries to Switzerland. They had been cut since late last week following the arrest of Libyan leader Moamer Kadhafi's son. "A tanker was loaded with oil yesterday (Tuesday) and left Libya for Genoa," Rolf Hartl told AFP. "It is the first tanker to have left Libya since the beginning of the crisis." Once offloaded, the 80,000 tonnes of crude will be pumped by pipeline to a refinery at Collombey, in western Switzerland, run by Tamoil, which is partly owned by Libya. Hannibal Kadhafi, 32, and his wife had been arrested at a Geneva hotel on July 15. The couple, freed on bail two days later, was accused of assaulting members of their staff. Libya is a member of the Organization of Petroleum Exporting Countries, the cartel that supplies about 40 percent of the world's crude oil.

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