Crude oil futures fell sharply on world markets on Friday as fears about Hurricane Ivan hitting petroleum-producing areas in the Gulf of Mexico receded.
On the New York Mercantile Exchange, light sweet crude for October delivery fell US$1.80 to US$42.81 a barrel in closing trade after flirting earlier with the level of US$45. The price of benchmark Brent North Sea crude oil for delivery in October tumbled US$2.02 to US$40.20 per barrel in closing trading in London.
After speculators pushed up prices in anticipation of Ivan threatening oil producing areas of the Gulf of Mexico, prices retreated after the latest forecast showed the powerful storm more likely to move up the Gulf coast of Florida, further east than earlier projections.
"People were very worried that Ivan would hurt oil production in the Gulf of Mexico and were cover-buying," said Seth Kleinman, analyst at PFC Energy.
"If Ivan doesn't cause any problem over the weekend, prices could lose another dollar," he said.
Prices had been heading higher after the storm, ripping across the Caribbean, shut some oil production off Trinidad and halted Venezuelan shipments.
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