Mumbai: Crude oil prices dropped $5 on Friday to hit a three-month low below $115 a barrel as the dollar surged and falling global economic growth hit demand. This has prompted Venezuelan energy minister Rafael Ramirez  to call for an OPEC production cut.

He said the oil cartel will discuss a production cut if market circumstances warrant it when the cartel meets next.

US light sweet crude, which was down $4.82 at $115.20 a barrel during the day, fell further to a three-month low of $114.90 in late evening trade. Nort Sea Brent crude was down $4.53 at $113.33 a barrel.

Oil prices have climbed new highs, hitting a record over $147 a barrel on 11 July.

Oil futures contract has lost nearly $10 a barrel in one week. Oil has shed more than $32 a barrel since hitting a record-high $147.27 on 11 July.

Analysts attribute oil's climbdown to the revival of the dollar's value and a gloomy global economic outlook.

Oil staged a six-year rally with a seven-fold rise in prices fed by strong demand from emerging economies like China and India sent and support from investors rushing into commodities to hedge a weak dollar.

But the same rally has now started to bite, hitting consumer demand and thereby causing a chain reaction that ultimately hit demand for oil as well.

The dollar surged against the euro and was on track for its biggest one-day gain in four years as concerns mounted that the US economic slowdown was spreading around the world.

The market also ignored the possible effects of the Russian involvement in the Georgian dispute. Georgia's pro-West president said it is at war and  that Russian forces are backing separatist forces in South Ossetia.

Analysts expect the fighting to disrupt energy exports from the Caspian region through Georgia.

Also, there was a disruption of supplies Azeri light crude  through the Baku-Tblisi-Ceyhan pipeline following a blast this week in Turkey.

This has forced BP to cut output by at least 400,000 barrels a day at the Azeri-Chirag Gunashli oilfields.

Oil cartel OPEC increased oil production 0.7 per cent in July aided by higher production by Saudi Arabia and Nigeria.

Venezuelan energy minister Rafael Ramirez  has called for an OPEC production cut if it were warranted by market circumstances when the cartel meets next.

Ramirez said member nations in the upcoming OPEC meeting would discuss oil's slump in recent weeks that has pushed prices from near $150 per barrel last month to around $115 in afternoon trading on Friday.

"Of course, we're going to discuss it," he said, regarding the fall in oil prices. Volatility in oil markets is primarily driven by financial speculation, Ramirez added.