NEW YORK: After more than six months of closing in triple-digit territory, oil prices dropped sharply Monday, falling under the symbolic $100-a-barrel threshold as financial woes raised concerns about a slowing U.S. economy and slackening oil demand.

Oil for October delivery was down $4.15, or 4.1 percent, at $97.03 a barrel Monday afternoon in New York, after dropping as low as $94.13, the lowest level since February. Oil has fallen more than $50, or 34 percent, from its mid-July peak. In London, Brent oil from the North Sea fell $5.41, or 5.5 percent, to $92.17 a barrel in contracts for October delivery.

The decline Monday came after Hurricane Ike wreaked havoc in the Gulf of Mexico, disrupting U.S. oil production and shutting down refineries along the Texas and Louisiana coasts. While oil companies are still assessing the damage, preliminary reports suggested that the storm's impact on the oil and gas facilities was less severe than first feared.

Still, many refineries along the Gulf Coast, the largest energy hub in the United States, remained closed because of power shortages or flooding. It could take weeks before U.S. gasoline supplies return to their pre-storm levels.

These disruptions pushed up gasoline prices even as oil fell.

Exxon Mobil said that its refinery in Beaumont, Texas, the third largest in the United States, was the most seriously hit when a wall of water from the storm surge flooded the facility. The company managed to restore power to its Baytown, Texas, refinery, the largest in the country, which it said sustained only "limited" damage.

The fact that oil prices have fallen despite the disruptions caused by Hurricane Ike to offshore production, importing terminals and coastal refineries, reflects the deep shift in market sentiment in recent months. Oil prices peaked at $147.27 a barrel on July 11 but have been falling since then as oil consumption slowed drastically in Western countries.

Worldwide oil demand should grow by about 700,000 barrels a day this year, about half the average. All of that growth should come from China and the Middle East, according to the International Energy Agency, the energy watchdog for industrialized countries.

Earlier this year, some analysts had predicted that surging demand and limited supplies could push up the price of oil as high as $200 a barrel by the end of the year. Now, many are scaling back their forecasts given the darkening economic outlook. On Saturday, Paolo Scaroni, the chief executive of Eni, the largest Italian oil company, predicted that today's economic conditions could rapidly push prices down to $70 a barrel.

The crisis on Wall Street finally took the wind out of the oil rally, with some analysts fearing it might spread to Asia and Europe, sparking a global downturn. The decline Monday came after a tumultuous weekend in New York, where two of Wall Street's most prestigious firms came to an end, with Lehman Brothers filing for bankruptcy protection and Merrill Lynch agreeing to be acquired by Bank of America.

"Wall Street now has everybody worried about the global economy," said Adam Sieminski, chief energy economist at Deutsche Bank.

Hurricane Ike prompted the closure of 14 refineries in Texas and Louisiana, or about 20 percent of U.S. refining capacity. The hurricane, which came ashore near Galveston, Texas, on Saturday, also shut down all oil and natural gas production in the Gulf of Mexico, or about a quarter of U.S. production.

"My guess is the market thinks the hurricane was not as damaging as it might have been," said Roger Plank, executive vice president of Apache, a large producer in the Gulf of Mexico. "But I think it's premature to determine when production will be restored."

The U.S. Department of Energy said it would make oil from the national petroleum reserves available to refiners to make up for crude oil shortfalls. On Monday, Citgo Petroleum requested one million barrels of crude from the Strategic Petroleum Reserve "to alleviate potential fuel shortages" caused by Hurricane Ike. The company said it needed the crude for its refinery in Lake Charles, Louisiana, one of the few refineries still operating along the coast of the Gulf of Mexico.

Many analysts are unsure how low oil prices could fall. Last week, the Organization of Petroleum Exporting Countries signaled it was concerned with oil around $100 a barrel, with some members pushing for reduced production. That move was opposed by Saudi Arabia, the world's biggest oil exporter, which indicated it would keep pumping oil to get prices to more manageable levels.

"The Saudis have been clear," Sieminski said. "They think the global economy has got issues and they would like prices to be lower for a while."

Oil demand remains the biggest uncertainty. Higher energy prices have caused consumers in developed countries to cut back on their consumption. But demand remains strong in other parts of the world, particularly in developing economies in Asia and the Middle East, where the price of gasoline is generally subsidized by the government.

"Clearly we're in bearish territory, but not everything is bearish out there," said Michael Wittner, the global head for oil research in London for Société Générale. "The bullish long-term story - Asia-led demand growth meets maturing and more expensive supplies - is still there."

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