Oil prices slid today as a hurricane in the Caribbean was downgraded to a tropical storm, reducing the threat to US oil facilities on the Gulf Coast.
Support also came from Iran insisting it would never stop uranium enrichment despite a UN deadline looming this week. US crude for October delivery fell 77 cents to $71.74 a barrel earlier this morning after gaining 15 cents on Friday. London Brent crude traded down 57 cents at $72.13.
Ernesto became the Atlantic season's first hurricane yesterday, but was later downgraded back to a tropical storm as it skirted the south of Haiti and moved towards Cuba.
Forecasters said the storm could still regain hurricane strength, and emergency managers issued a hurricane watch for the Florida Keys, but this was a path away from US Gulf oil refineries.
Oil majors BP, Shell Oil and ConocoPhillips said yesterday they were pulling non-essential workers from rigs in the US Gulf Coast.
Traders are on high alert for the risk of storm damage to rigs and refineries after hurricanes Katrina and Rita battered the region a year ago and temporarily halted almost all oil and natural gas output from the US Gulf of Mexico.
US oil output has already been cut by a partial outage at BP's Prudhoe Bay in Alaska, the largest oilfield in the United States, pumping at around 110,000 barrels per day (bpd) from its normal 400,000-bpd output after pipeline corrosion.
Price losses were limited after the world's fourth-largest oil exporter Iran said on Sunday its atomic programme was "irreversible".
The UN Security Council has told Iran to suspend atomic fuel work by August 31st or face possible sanctions.