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Oil drops to $89 low

Oil hit a three-week low Monday as a major North American pipeline got set to reopen.

Benchmark oil fell $1.32, or 1.5 per cent, to finish at $88.73 per barrel in New York. That followed a 2 percent decline on Friday and is the lowest close since October 3.

In London, Brent crude fell 70 cents to end at $109.44 a barrel.

TransCanada is expected to soon restart its 2,100-mile (3,380-kilometer) Keystone pipeline. It was shut after tests showed possible safety issues. The pipeline carries about 590,000 barrels of crude per day from Canada to facilities in the US Midwest.

Falling U.S. stocks may have also influenced oil traders. Caterpillar, the world's biggest maker of construction and mining equipment, said it doesn't expect the global economy to improve until the second half of next year. Such forecasts signal reduced demand for oil.

In other energy futures trading in New York:

- Heating oil fell 5.78 cents to finish at $3.0767 per gallon.

- Wholesale gasoline fell 4.88 cents to end at $2.6475 per gallon.

- Natural gas fell 16.5 cents to finish at $3.452 per 1,000 cubic feet.