Associated press

Oil prices resumed their descent Friday as a strengthening dollar and worries about economic growth offset supply concerns over a sabotaged pipeline in Turkey.

Light, sweet crude for September delivery slumped $2.11 to $117.91 a barrel in early trading on the New York Mercantile Exchange, after dipping as low as $117.05 in electronic trading.

Oil had risen $1.14 Thursday to close at $120.02 a barrel after Turkey's state-run news agency Anatolia said the pipeline, attacked by the separatist group Kurdistan Workers' Party, could be shut down for up to 15 days. The pipeline can pump slightly more than 1 million barrels of crude oil per day, or more than 1 percent of the world's daily crude output.

In Turkey, pipeline shareholder BP PLC and other oil companies declared what's called a force majeure after the pipeline attack, freeing them of contractual obligations to deliver crude.

'While that is significant, the 'strength' this event supposedly created yesterday was rather insignificant,' wrote trader and analyst Stephen Schork in his daily Schork Report, referring to oil's fairly modest price bounce.

With the dollar increasing in value against the euro and yen after the European Central Bank and the Bank of England both left their benchmark interest rates unchanged, traders found some reason to sell. The weak dollar had previously been boosting oil prices, because dollar-denominated commodities are often used as hedges against inflation and a falling U.S. currency.

By early U.S. trading, the euro dropped to $1.5067 against the dollar, while the dollar rose to 109.93 yen.

Furthermore, the central banks' actions bolstered the growing belief in the energy markets that economic growth is slowing and dampening demand for crude oil products.

'The dollar is a factor, but the dominant factor is the perception that high oil prices coupled with slower economic growth in developed countries will curb oil demand,' said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney. 'Oil prices are still at very high historical levels.'

Nymex front-month crude futures are down about 18 percent from a record high of $147.27 hit on July 11, but are still up more than 60 percent from a year ago.

In other Nymex trading, heating oil futures slipped by more than 5 cents to $3.18 a gallon, while gasoline prices fell by over 4 cents to $2.96 a gallon. Natural gas futures fell by more than 10 cents to $8.47 per 1,000 cubic feet.