Oil falls toward $100

By Richard Valdmanis

NEW YORK (Reuters) - Oil prices fell toward $100 on Thursday, pulled lower by strength in the U.S. dollar, soft global energy demand, and a report Saudi Arabia has no plans to cut output despite OPEC's agreement this week to trim supply.

The losses were tempered somewhat by intensifying disruptions in the United States caused by Hurricane Ike, which paralyzed a quarter of U.S. crude oil production and more than 16 percent of its refining capacity.

"This is a market that wants not only to test $100 a barrel but ultimately break $100," said Tom Knight, trader at Truman Arnold in Texarkana, Texas.

U.S. crude CLc1 fell $1.71 to settle at $100.87 a barrel after dipping as low as $100.10, the lowest level since early April. London Brent LCOc1 slipped $1.68 to $97.29 a barrel after dropping to a six-month low of 96.99.

Downward pressure came from a rising U.S. dollar, which scaled a one-year high against the euro. A stronger dollar can weaken the purchasing power of buyers using other currencies -- adding momentum to already flagging global consumption.

Encouraging the losses, the Saudi-owned Al Hayat newspaper said on Thursday that Saudi Arabia has no plans to cut oil output at present unless customer demand falls.

The report came a day after OPEC members agreed to trim back output following a steep decline in oil prices since the peak above $147 a barrel hit in mid-July.

Limited support came from Hurricane Ike, which paralyzed about a quarter of U.S. crude oil production and more than 16 percent of its fuel production capacity Thursday.