Oil resumes drop, falling below $125

Oil fell back below $125 a barrel on Friday, extending a decline that has knocked more than $20 off prices in two weeks.
Concern high prices and the slowing U.S. economy will undermine demand have driven oil down from a record $147.27 on July 11. Technical trading and a short-covering bounce had buoyed prices earlier.
U.S. crude was $1.12 lower at $124.37 a barrel by 1320 GMT, off a seven-week low of $123.50 hit on Thursday. London Brent was off $1.12 at $125.32.
Some analysts said oil could be headed lower still.
Jim Ritterbusch, president of Ritterbusch & Associates, said crude could drop to as low as $117 within about a week, while others said they expected trading to be volatile in a wide range.
"We have identified the $115-$140 interval as the most likely trading range for the quarter," Barclays Capital said in a research note.
Even after the recent price fall, oil has risen by almost 30% in 2008 and is up from below $20 in early 2002 due to rising demand from fast-growing economies such as China.
Oil's rally, which the OPEC exporter group has blamed on factors beyond supply and demand, has led to pressure on politicians to take action to help consumers paying higher fuel prices.
The U.S. Senate will vote on Friday on a Democratic bill that seeks to curb excessive speculation in the energy markets, but Republicans said they had the votes to block its passage.