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Oil falls to $113 in Asia on stronger dollar
(Agencies)
Updated: 2008-08-12 22:44

SINGAPORE -- Oil prices fell Tuesday in Asia to a 3-month low as a stronger dollar and weakening crude demand from China weighed on investor sentiment.

Light, sweet crude for September delivery fell $1.45 to $113 a barrel in electronic trading on the New York Mercantile Exchange by late afternoon in Singapore. The contract lost 75 cents overnight to settle at $114.45, the lowest close for a floor session since May 1.

A report from China on Monday that the country's crude oil imports in July were down 7 percent from last year fueled expectations that the economic slowdown affecting the US and Europe may be spreading to Asia and cutting demand for oil.

A stronger dollar is also pushing prices down. The euro fell Tuesday to $1.4894, while the dollar was holding near 110 yen.

A weak dollar helped boost oil prices earlier this year, because dollar-denominated commodities are often used as hedges against inflation and a falling US currency. But gains in the currency are reversing that trend.

In London, Brent crude for September delivery fell $1.21 to $111.46 a barrel.

Prices fell despite concerns that the widening conflict between Russia and Georgia over the breakaway province of South Ossetia could disrupt supplies in the region.

The province broke away from Georgian control in 1992. Georgia, whose troops have been trained by American soldiers, began an offensive to regain control over South Ossetia last week, launching heavy rocket and artillery fire and air strikes that pounded the regional capital Tskhinvali.

Nymex crude is down about $33, or 22 percent, from its high of $147.27 on July 11.

In other Nymex trading, heating oil futures fell 1.31 cents to $3.1064 a gallon (3.8 liters) while gasoline prices dropped 1.42 cents to $2.8524 a gallon. Natural gas futures rose 0.1 cent to $8.35 per 1,000 cubic feet.