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Oil price drops back down again as worries over supply are allayed

The price of oil began to fall again on Friday, giving up most of the gains it had made the previous day in the first rally in two weeks.

Benchmark U.S. crude for August delivery was down 54 cents to US$102.37 a barrel at 0815 GMT in electronic trading on the New York Mercantile Exchange. The contract closed up 64 cents at US$102.93 a barrel on Thursday.

Oil prices shot up in the last month to a 10-month high over concerns that strife in Iraq might disrupt supplies. However, they have since been easing back down as al-Qaida inspired militants' gains in Iraq did not affect oil exporters.

Also putting downward pressure on prices is the prospect of a sudden return of Libyan oil to the global market. Libyan exports have been all but cut off over the last several months because of labor and political strife that has shut ports and disrupted production. Agreements with local militias are now expected to open two ports, and a major field restarted production Tuesday.

Brent crude, a benchmark for international oils, fell 47 cents to US$108.54 on the ICE exchange in London.

In other energy futures trading:

— Wholesale gasoline fell 1 cent to US$2.947 a gallon.

— Natural gas added 1.7 cents to US$4.137 per 1,000 cubic feet.

— Heating oil was down 0.5 cent at US$2.889 a gallon.

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