Oil prices dip as hurricane fears ease
Oil prices dropped back for the second day today as fears over the potential damage from Hurricane Dean on US oil production eased.
The price of New York-listed light, sweet crude oil dipped to $70.80 a barrel, down from the record highs of $78.77 a barrel seen earlier in the month.
Oil prices have been declining over the last two days after forecasts revealed that Hurricane Dean, now a potentially catastrophic Category 5 storm, looked set to miss key US oil platforms and refineries in the Gulf of Mexico.
A few companies had evacuated some rigs and suspended production as the storm headed towards the coasts of Mexico and Belize, but it now looks as though most American operations will escape without too much damage.
Oil prices rocketed to record highs at the start of August amid fears that dwindling supplies would not be able to meet global oil demand.
However, the current turmoil in equity markets worldwide has seen crude prices weaken on concerns that a cooling global economy could result in a softening in energy demand. The end of the key summer driving season in the US also led to a seasonal dip in demand.
Additionally a number of investors, particularly speculative investors who look to make fast money, have also exited the market to avoid the current turbulence, according to analysts.
The price of crude rose by around a dollar on Friday on the possibility that Hurricane Dean could hit the Gulf’s oil facilities, but as the danger lifted, crude prices have resumed their recent fall.
