* Oil falls, extending a slide from last weeks record to
nearly 13 percent.
* Iran tensions easing, demand worries weigh
* Traders eye developing weather system in Caribbean
(Recasts, updates throughout, adds fresh quotes)
By Matthew Robinson
NEW YORK, July 18 (Reuters) - Oil fell to below $129 a
barrel on Friday, extending a slide that has knocked nearly 13
percent off last week's record peak on easing tension between
Iran and the West and growing demand concerns.
Oil's losses this week are the steepest in dollar terms
since futures began trading in New York in 1983 and the
steepest in percentage terms since December 2004.
U.S. crude <CLc1> settled down 41 cents at $128.88 a barrel
in the fourth straight day of losses, while London Brent crude
<LCOc1> fell 88 cents to settle at $130.19 barrel.
Growing concerns about the health of the U.S. economy due
to the housing crisis and rising fuel costs have pressured
prices this week, sending crude down from last Friday's
all-time high over $147 a barrel.
Oil demand in the world's top consumer has slipped this
summer compared with last year, as Americans scale back holiday
travel plans.
Further downward pressure came from the easing of the
tensions between the West and OPEC member Iran that have helped
support prices this month.
The United States plans to send an envoy to Geneva to join
nuclear talks with Iran on Saturday to underline its commitment
to a diplomatic solution to the impasse over Tehran's nuclear
program.
Iranian Foreign Minister Manouchehr Mottaki said on Friday
he saw almost no possibility of Israel or the United States
attacking his country over the program, which has raised
concerns of a potential Iranian oil supply disruption.
"I think we are still caught in this downward trend that we
started this week, really nothing has turned it around," said
Tom Bentz, BNP Paribas Commodity Futures Inc, noting traders
were keeping an eye on a weather system in the Caribbean.
"There's not a very clear picture whether it will develop
or not."
Oil prices had risen earlier on threats the developing
weather system could hit the Gulf of Mexico, which contains a
high concentration of oil and natural gas facilities, in about
five days, according to weather models.
The low-pressure system, currently northwest of Aruba, was
showing high potential for strengthening into a tropical
depression. []
A five-day national oil workers strike that had limited
effect on output from Brazil's state-run energy company
Petrobras <PBR.N><PETR4.SA> will end at midnight Friday, but
more walkouts loom on the horizon. Workers will meet on July 25
to discuss their next move. []
Local residents blew up a Nigerian oil pipeline operated by
Italy's Eni in the restive Niger Delta, cutting output further
in the world's eighth largest oil exporter.
Attacks by militants in the OPEC nation have helped support
gains that have added 30 percent to crude prices this year.
Rising demand from emerging economies in Asia helped send oil
on a six-year rally that has sent prices up sixfold.
(Additional reporting by Gene Ramos in New York, Santosh Menon
and Ikuko Kao in London and Felicia Loo in Singapore; Editing
by Christian Wiessner)
(matthew.robinson@thomsonreuters.com: +1 646 223 6052; Reuters
Messaging: matthew.robinson.reuters.com@reuters.net))
