Light, sweet crude for September delivery fell to US$71.31 a barrel in Asian electronic trading on the New York Mercantile Exchange, midmorning in Singapore. September Brent crude fell to US$69.68 a barrel on the ICE futures exchange in London. Oil prices dipped on expectations that key oil and gas facilities in the Gulf of Mexico will be spared by Hurricane Dean- a strong Atlantic hurricane. Traditionally, September is the peak month for hurricanes and so the oil market faces could move forward in the next few weeks.
Hurricane Dean, that battered Jamaica with gusting winds and torrential rains, fortunately wrecked limited havoc as Dean's eye passed to the south on Sunday night. The National Hurricane Center in Miami projected Dean to reach the most dangerous hurricane classification, Category 5, with winds of 160 mph (257 kph) before crashing into the Mexican coastline near Cancun on Monday night or Tuesday. The storm was forecast to make landfall Wednesday, likely along the coast of northern Mexico. However, prices will not have a steep fall as the supply-demand fundamentals for oil remain about balanced.
Royal Dutch Shell PLC is said to have evacuated 275 nonessential personnel from the Gulf. Chevron plans to evacuate a small number of nonessential personnel from deep water facilities, but that production would continue at normal levels. Exxon Mobil Corp., BP PLC and Valero Energy Corp. are monitoring Dean, but have not yet evacuated any workers.