World oil prices fell in Asian trade today as fears about slowing US demand outweighed the increasing likelihood of heightened tensions over Iran's controversial nuclear programme, dealers said.
In morning trade, New York's main contract, light sweet crude for September delivery fell $1.14 to $120.27 a barrel from $121.41 at the close of floor trading in the United States Monday.
London's Brent North Sea crude for September delivery dropped $1.13 to $119.55.
Oil prices fell below $120 in New York and London yesterday for the first time in three months after latest US economic indicators signalled weakness in the world's biggest economy, dealers said.
The monthly US Commerce Department survey showed yesterday consumer spending, which fuels two-thirds of output, had cooled in June while inflationary pressures accelerated.
The US is the world's biggest energy user and any signs of slowing consumer spending usually weighs down global oil demand projections.
Tropical Storm Edouard, expected to make landfall today, will likely only provide limited boost to prices as investors are more concerned with American oil demand, analysts said.
"US demand won't recover soon. Tropical Storm Edouard should bring a short term support but demand outlook weighs on prices," commodity analysts from Societe Generale said in a report.
