Price of oil near five-week low

The strong dollar has hit oil prices

Oil prices are hovering at a five-week low of about $64 a barrel, amid fears that a global recovery could take longer than previously thought.

US crude fell $2.27 dollars to $64.46 a barrel in afternoon trade. Earlier, it had dipped to $63.85, the lowest intraday price recorded since 28 May.

Meanwhile in London, Brent crude oil declined $1.27 to $64.34 a barrel.

Poor economic data last week in both the US and Europe suggested that the global recession was not over.

US markets had been closed on Friday in the run-up to Independence Day.

"Prices are extending their losses from last week, based on the poor jobs report in the United States," said Tony Nunan, an energy risk manager with Mitsubishi Corp.

"People are starting to wonder about the strength of the US economic recovery. This does not look good for oil demand, because it means that consumer spending will remain weak."

The global slowdown is denting demand for oil from both individual consumers and companies.

'Stalling stock markets'

On Monday, the dollar strengthened, limiting oil's appeal as a safe haven investment.

Typically, investors shift towards commodities when the greenback weakens.

"It's a definite break to the downside, probably sparked by the poor economic data and stalling stock markets," said Christopher Bellew, a broker at Bache Commodities in London, in response to the latest fall in oil prices.

The market will be looking for clues about the state of the world economy when G8 industrial nations gather in Italy later this week for a three-day meeting.

Volatility

Separately on Monday, the leaders of France and Britain, at a meeting in the French resort of Evian-les-Bains, called for measures to prevent oil price volatility.

A year ago, crude oil was trading at about $147 a barrel, more than double the current price.

French President Nicolas Sarkozy said they would publish a joint document on the topic and called for a "reasonable" range for the price of crude.

British Prime Minister Gordon Brown said: "We have got to look at... how the world economy can grow without the instability of a volatile oil price preventing growth."

Mr Brown added that it was a topic to be debated with the Saudis, as well as oil cartel Opec and with G8 leaders, who are meeting in Italy this week.

"There's got to be these discussions to understand what the demand will be in the future, what the supply will be in the future," said Mr Brown.