Oil prices fell over a dollar in early trading this morning amid growing fears over the US subprime crisis and easing tensions in the Middle East.
US light crude for December delivery fell $1.17 to $94.76 a barrel by earlier this morning, partially reversing previous session's $2.44 surge. London Brent crude fell 80 cents to $91.28.
News that the head of the US's largest bank, Citigroup, had resigned late yesterday after announcing a writedown of $11 billion due to subprime mortgage losses raised new concerns about the health of the US economy and reignited fears of slowing energy demand growth.
Analysts said oil prices, which hit a record $96.24 on November 1st, were also pushed down by easing tensions in the Middle East.
Signs of easing tensions between major oil producer Iran and the West also contributed to oil's losses. Iran said yesterday it welcomed proposals to work with other countries to enrich uranium but that it will not accept an offer that requires Tehran to halt its sensitive atomic work.
Concerns about tight supplies ahead of the northern hemisphere winter and rising speculator interest have also contributed to oil's recent bull-run.