UK terror threat: Oil prices fall on demand fears

Crude oil prices fell nearly $1 a barrel today after thwarted attacks on airplanes led many carriers to cancel flights, and could mean lower demand for jet fuel and dent consumer confidence.

Light, sweet crude for September delivery dropped 85 cents to $75.50 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. September Brent crude futures on London's ICE Futures fell 98 cents to $ 76.30 a barrel.

"The price fall this morning is on the back of the airline bomb plot which is negative jet demand and consumer confidence," Olivier Jakob at Petromatrix, said.

Gasoline futures dropped 4 cents to $ 2.1280 a gallon. Heating oil futures fell 3 cents to $ 2.0750 a gallon, and natural gas futures lost 15 cents to $ 7.500 per 1,000 cubic feet.

But traders felt the fact that there was no actual attack would limit the price impact, with underlying sentiment for higher prices focused on lower gasoline inventories, geopolitical worries and production cuts from a pipeline shutdown in Alaska and unrest in Nigeria.

In Nigeria, officials said gunmen seized two foreign oil workers today amid the surge of violence targeting the petroleum industry in Africa's oil giant.