NEW YORK – World oil prices dropped Tuesday as Hurricane Ida fizzled into a tropical depression, easing worries about the potential threat to petroleum installations in the Gulf of Mexico.
Traders also digested the latest oil demand and price forecasts from the Paris-based International Energy Agency (IEA), a global energy watchdog that advises industrialized nations.
New York's main contract, light sweet crude for delivery in December, eased 38 cents to close at $79.17 a barrel.
London's Brent North Sea crude for December delivery declined 27 cents to settle at $77.50.
Crude futures rebounded Monday on dollar weakness and concerns over Hurricane Ida's potential damage.
Ida fizzled into a tropical depression Tuesday as it reached the US Gulf coast. It was a category two hurricane storm when it struck eastern Central America and churned towards Mexico's Yucatan Peninsula Sunday
It still dumped heavy rain and triggered some flooding along the coast but without the deadly winds Ida packed over the weekend.
The storm however remains dangerous: it is forecast to dump up to eight inches (20 centimeters) of rain across the southeastern United States, and area officials were preparing for floods and damage caused by the ocean surge.
"People don't expect hurricanes this late in the season to do much damage," said independent oil analyst Ellis Eckland. "The market was disproportionately weak even considering Ida."
Elsewhere, the IEA predicted Tuesday that the oil prices, without adjustment for inflation, would be $100 a barrel in 2020 and $115 in 2030, and added that demand would increase by one percent per year.
Global demand would rise from 85 million barrels per day in 2008 to 105 mbd in 2030, assuming that forthcoming negotiations on global warming in Copenhagen did not result in immediate big changes in energy policies, the IEA forecast.
The average oil price this year would be about $60 per barrel against a background of weak economic activity, according to the IEA.
The price would then rise with economic recovery to $115 a barrel in 20 years' time in constant dollar valuations, meaning after stripping out the effect of inflation, the International Energy Agency said.
