Oil prices drop below US$127 a barrel on worries about demand, CFTC investigation

Oil dropped below US$127 a barrel Monday on worries that prices are cutting into demand and as a probe into futures trading by a U.S. regulator continued to weigh on the market.

Light, sweet crude for July delivery was down US$1.11 to US$126.24 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe.

On Friday, the contract settled at US$127.35 a barrel, up 73 cents after dipping below US$125 and then rebounding.

In London, July Brent crude futures fell US$1.27 to US$126.51 a barrel on the ICE Futures exchange in London.

Jitters about record high fuel and energy prices _ particularly in the U.S., which …