LONDON, July 25: Oil prices headed south again on Friday, cutting short a brief rally amid a drop in fuel demand across the United States, the world’s biggest consumer of energy.

Crude futures had risen earlier on Friday and on Thursday in what traders described as a technical rebound following two days of heavy falls.

New York’s main contract, light sweet crude for September delivery, shed $1.49 to $124 a barrel in pit trading.

Brent North Sea crude for September dropped $1.41 to $125.02 in electronic deals.

Ken Hasegawa, manager of the energy desk at Newedge brokerage, cited by Dow Jones Newswires, said on Friday that the market would trade in a short-term range of $123-128.

On Wednesday, crude futures had tumbled by about $4 after a bigger-than-expected increase in US gasoline (petrol) reserves signalled weaker demand in the United States.

At the same time, concerns eased over Hurricane Dolly in the Gulf of Mexico as the storm tracked away from oil installations there.—AFP