Oil prices fall in the wake of Lorenzo

1 October 2007

Oil prices have started to fall after Hurricane Lorenzo missed production infrastructure in the Gulf of Mexico.

The latest major tropical storm hit landfall in the Mexican state of Veracruz on Friday, causing landslides and flooding which led to at least five fatalities.

However, the fact that it had no impact on oil production saw prices fall from the near record level of last Thursday.

US crude for November delivery slipped $1.22 to close at $81.66 on Friday, before losing a further three cents during Asian trading on Monday.

The price of London Brent crude dropped by 86 cents on Friday, but gained three cents during early trading on Monday to reach $79.20.

Price movements in the near future are likely to be dictated by data on the US economy, as many analysts are concerned that the fallout from the sub-prime mortgage crisis could lead to wider economic problems that would prompt a downturn in demand for oil-based products.