Oil prices nearing five-month low to hit $97.85

U.S. crude fell as low as $101.43 and was trading 62 cents down at $101.92 by 1135 GMT.

London Brent slipped, outpacing the fall in U.S. crude prices, to $97.85, the lowest level since early March. It was trading 42 cents lower at $98.55 at 1135 GMT.

On Wednesday, U.S. crude touched $101.36, the lowest price since early April, despite a surprise production cut by OPEC of around half a million barrels per day.

Pressure came from a rising dollar and a report from the International Energy Agency (IEA), which lowered its oil demand growth forecasts due to a slowing global economy.

U.S. government data on Wednesday showed falls in oil product demand.

"Improvements in (market) sentiment have not been seen even after OPEC's pledge on production cuts," Japan's Mizuho Corporate Bank said in a research note.

"A bearish development is likely to continue due to mid-term factors of lower demand amid a slowing global economy. The psychological $100 level will be tested."

Limited support came from Hurricane Ike. It gathered strength as it churned through the Gulf of Mexico's warm waters on Thursday on a track that would skirt the heart of the U.S. offshore oil patch before slamming into the Texas coast late on Friday or early on Saturday.

Oil output from the region was still less than 5 percent of normal after Hurricane Gustav spun through the same area.

Product prices were gaining support from the approach of Ike, despite falls in crude oil.