Oil falls to near seven-month lows - below USD 94

Lehman Brothers filing for bankruptcy protection and Bank of America's agreement to buy Merrill Lynch stirred concerns mounting global economic problems would slow energy demand further, sending investors out of oil and into safer havens. U.S. crude dropped USD 4.28 to USD 96.90 barrel by 1024 GMT after touching a nearly seventh-month low of USD 96.31 a barrel. U.S. oil dropped below USD 100 briefly on Friday for the first time since early April, with trade open for a special session on Sunday due to Hurricane Ike. London Brent crude fell USD 3.83 to USD 93.75 a barrel. Energy firms rushed to offshore facilities and coastal refineries to check for damage on Sunday after Hurricane Ike's direct hit on the Houston energy hub left a quarter of U.S. oil and refined fuel production idled and millions without power. Early reports from emergency officials and oil companies indicated little or no severe damage to energy infrastructure - signalling a possible quick recovery to production - though near-term supply problems were expected.

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