Crude Oil Slips Below $94 In Early Trading

Oil prices dropped below the $94 a barrel mark in early trading, pulling away from record highs reached last week. Light sweet crude for December delivery moved at $93.95, down $1.98 on the session. Oil moved lower as tensions eased in the Middle East, reducing fears that crude oil supplies could be disrupted.

Last week, crude continued its march towards $100 a barrel and the inflation-adjusted record levels of $101.70, reached in April of 1980. Oil finished the week up by about 4.4%. Prices were pushed by strong employment data in the U.S. Friday which could up the demand for energy. Oil finished up $2.44 on Friday after hitting a record high of $96.24 in electronic trading Thursday morning.

Traders anxiously await weekly inventory data on Wednesday, which could push oil past the $100 a barrel mark. Oil soared Wednesday after the Department of Energy reported a drop in stockpiles and posted a record close of $94.53. The weekly report showed crude inventories were down 3.89 million barrels for the week ended October 26. Analysts had expected crude oil inventories to increase by about 300,000 barrels.On Monday, investors looked to ISM non- manufacturing data which will be released at 10 a.m. ET.

Traders will also monitor speeches by US Federal Reserve''s board members Frederic S. Mishkin at New York and Randall S. Kroszner at Virginia in the morning.Meanwhile, natural gas for December delivery fell to $8.104, down 3.14 on the session. Prices are down for a second straight session, slipping away from a six-week high. In metal news, gold prices inched lower on Monday morning after reaching its highest level in more than a quarter-century late last week.

Bullion for December delivery traded at $806.30, down $2.20 on the session. The metal touched as high as $811.00, its highest level since 1980, on Friday. The U.S. dollar saw a little strength Monday in New York, reducing gold''s hedge value. The greenback pulled away from a record low against the euro and also saw strength against the sterling and others in early trading. Gold reached as low as $803.50 in electronic trading, but pared some of the losses as the dollar eased back against the euro.

Gold usually moves in the opposite direction as the dollar because of its hedge value. Gold soared sharply on Friday and moved past the $800 an ounce level, closing up $14.80 on the day. The metal soared after the US Federal Reserve''s decision to lower its interest rates by 25 basis points to 4.5% on Wednesday.

The precious metal has been moving higher for 2 ### months as weakness in the greenback has upped gold''s hedge value. Bullion is up modestly for the week, adding to sharp gains from the previous week.