US crude futures dipped on Monday after Russia said it would begin withdrawing forces from Georgia, a key energy supply route from the Caspian to Europe. Nymex crude for September delivery fell 22 cents to $113.55 a barrel in Globex electronic trading by 2250 GMT.
It settled down $1.24 at $113.77 a barrel on Friday, after dipping to $111.34, the lowest level since May 2. Russia announced it would begin withdrawing forces from Georgia on Monday after a war that dealt a humiliating blow to the black sea state and raised fears for energy supplies to Europe. Georgian President Mikheil Saakashvili, whose failed invasion of the pro-Russian breakaway region of South Ossetia triggered a Russian backlash that shocked the West, called for international monitoring of the pullout.
Worries that Tropical storm Fay off the US could disrupt oil supplies kept prices supported. Royal Dutch Shell and Marathon Oil Corp pulled out non-essential workers from the eastern and central Gulf of Mexico due to the threat, but offshore production was unaffected, the companies said on Sunday. Opec member Venezuela said on Friday that oil market fundamentals are in "perfect equilibrium" and there was no need to vary Opec output.
"We don't believe there's a need to place additional volume on the market," Oil Minister Rafael Ramirez told Reuters in the capital of Paraguay, where he attended the swearing in of Paraguay's new president. In Nigeria, twelve Nigerian militants and a naval officer were killed in a gun battle on Friday near a Royal Dutch Shell natural gas plant in the oil-producing Niger Delta, military and security forces said.
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