Oil prices fell more than a dollar on Monday as the first tropical storm of the Atlantic hurricane season looked set to steer clear of oil infrastructure in the US Gulf Coast.
US light, sweet crude for July delivery settled down $1.27 at $70.36 after falling as low as $70.20, while Brent crude fell by $1.55 to $68.93 a barrel.
On Sunday, Alberto became the first named tropical storm of the US hurricane season, reviving memories of the devastation wrought last year by Rita and Katrina.
The US National Hurricane Centre on Monday issued a hurricane warning for Florida's Gulf Coast as Alberto roared toward land, packing winds near 70 mph (110 km per hour). Tropical storms become hurricanes once their maximum sustained winds reach 74 mph (119 km per hour).
But most analysts and forecasters predicted Alberto would spare refineries and oil platforms in the Gulf of Mexico, source of about 25 percent of US oil and natural gas.
"I don't think it's really that much of a concern right now," said John Brady, a broker at ABN Amro in New York. "All it does is tell us we really are in hurricane season."
About 15 percent of production is still shut in the US Gulf following last year's violent hurricanes. Shell Oil Company said on Monday the company's giant Mars oil platform was expected to return to full production by the end of June following Hurricane Katrina.
Devon Energy Corp on Sunday evacuated workers from a platform because of Alberto and Anadarko Petroleum Corp said on Monday it had suspended some drilling. However, it predicted operations were likely to return to normal by Tuesday.
Prices on Friday had risen by more than a dollar on fears about instability in oil producer Iraq and possible disruption of Iranian supplies.
Iran initially had appeared amenable to a package of proposals from Western powers aimed at persuading it to halt nuclear enrichment.
But a UN watchdog said on Thursday Iran had launched a fresh round of enrichment and Tehran said on Monday it would not negotiate over its right to enrich uranium.
Iran restated its position just before the International Atomic Energy Agency's governing board began meeting in Vienna. It was expected to debate Iran, but not to pass any resolutions.
In Iraq, al Qaeda vowed to carry out further attacks following the killing last week of its leader in the country, Abu Musab al-Zarqawi.
"We plan large-scale operations that will shake the enemy and rob them of sleep, in co-ordination with the other factions of the Mujahideen Council," an Internet statement said.
US Energy Secretary Sam Bodman said he did not expect the number of attacks on Iraqi oil operations to fall despite the death of Zarqawi, adding strong oil prices remained a concern.
"The current high energy prices are the result of very tight market conditions and we are finding very little spare capacity in the world today," Bodman said at a press conference with Qatari Oil Minister Abdullah al-Attiyah. Prices right now are too high, certainly for oil."
Al-Attiyah said Opec was doing its best to stabilise the market, but experts say the cartel is pumping near capacity and can do little to cool down prices.
Further price support came from news imports of crude oil by China - the world's second biggest oil consumer - had jumped by 19 percent in May compared with a year earlier, according to customs data.
SINGAPORE: Oil prices were steady below $72 a barrel on Monday, taking pause from last week's volatile ride as Tropical Storm Alberto, the first of the Atlantic hurricane season, formed off Cuba and aimed for Florida.
US light, sweet crude for July delivery edged 4 cents lower to $71.59 a barrel, having soared $1.28, or 2 percent, on Friday as continuing violence in Iraq dashed hopes that the death of al Qaeda's leader there would turn the tide for the country's struggling oil sector.
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