Oil fell below $70 a barrel today, extending a steep sell-off the previous session, although Iran's determination to press ahead with its nuclear programme was expected to check the slide.
US crude for October delivery was trading 87 cents lower at $69.74 a barrel earlier today and London Brent crude lost 84 cents to $69.98 a barrel.
Yesterday, US crude fell by $1.90 after Ernesto, which was briefly the first hurricane of the US season, was downgraded to a tropical storm.
Last year hurricanes Katrina and Rita temporarily knocked out all of the Gulf's offshore production and pushed oil prices to then record highs.
The hurricane season continues until around November, but analysts say the oil supply situation is comfortable and some predict oil prices, which hit an all-time peak of $78.65 early this month, will struggle to regain previous strength.
"The highs are not going to be repeated unless we get a really damaging hurricane," said Olivier Jakob of Petromatrix.
"The tensions in Iran are going to be there for a while, but for now there's nothing that says there's going to be any threat to our supply."
The United Nations Security Council has told Iran to suspend atomic fuel work by Thursday or face possible sanctions, but Iran has repeatedly said it will not stop uranium enrichment.