LONDON, July 14: World oil prices fell heavily on Thursday as Tropical Storm Emily appeared to be easing and levels of US crude inventories were deemed sufficient, soothing supply concerns, analysts said. New York’s main contract, light sweet crude for delivery in August, plunged $2.31 to $57.70 per barrel in early dealing. In London, the price of Brent North Sea crude oil for delivery in August fell $1.02 to $57.25 per barrel.

The market “is reacting to the fact that Tropical Storm Emily appears to be moving away from the production facilities in the Gulf of Mexico”, said Victor Shum, an analyst with US energy consultancy Purvin and Gertz.

Tropical Storm Emily took “a Southern route into the Gulf (of Mexico),” Fimat analyst John Kilduff noted, which was “far away from production infrastructure” in the region.

Fears that Emily could hit the Gulf, home to the majority of US crude production, had pushed New York’s main contract up $1.70 on Tuesday.

However, prices began falling on Wednesday after the US Department of Energy (DoE) said US crude oil stocks had fallen by 3.9 million barrels to 321 million barrels in the week ending July 8. Although the drop was above analysts’ consensus forecast for a 3.0-million barrel reduction, levels remained well above average for the time of year.

Crude stocks fell largely as a result of Tropical Storm Cindy, which forced a shutdown of production in the Gulf of Mexico during that week.

The impact of Hurricane Dennis would be seen in next week’s inventories data, the DoE said, after the deadly storm forced the evacuation of Gulf oil rigs last weekend.

Pushing prices down also was DoE data showing US distillates, including heating oil, rose by a higher-than-expected 3.2 million barrels to 120.4 million barrels last week.

Prices last week hit record peaks above $62 per barrel on concerns about possible shortages of heating fuel when the northern hemisphere winter begins at the end of the year, owing to storms and hurricanes in the Gulf of Mexico.

British oil giant BP was meanwhile battling to stabilize its giant Thunder Horse oil platform in the Gulf of Mexico, which has been listing heavily since the hurricane struck.—AFP