Oil price down as dollar rebounds

Oil prices have fallen from the record reached in July

The price of oil dropped more than a dollar on Friday, reversing earlier gains, as the dollar strengthened.

US sweet light crude shed $1.38 to $119.83 while London Brent crude dropped $1.35 to $118.81.

Investment in commodities tends to rise when the dollar is weak because they are seen as a safe alternative. The reverse happens as the dollar rises.

Another factor pushing down prices is speculation that oil producer group Opec could increase supplies.

Geopolitical tensions - such as the missile shield deal agreed earlier in the week between Poland and the US - had fuelled concerns about oil supply, buoying prices.

These concerns had abated and fears over the state of the US economy - which had sent the dollar down - had also eased.

Prices are far below the record of more than $147 a barrel reached in July.

Many analysts expect that US demand will slow as the economy contracts, pushing prices lower.