LONDON, Aug 28: Oil prices fell by more than $2 a barrel on Monday as concerns eased on Tropical Storm Ernesto’s threat to Gulf of Mexico energy production. The fall in prices also reflected a reaction to statements from Iran over the weekend that appeared to demonstrate the Islamic Republic’s willingness to negotiate over its disputed nuclear programme, analysts said.

With weather forecasters predicting that Ernesto could strengthen to a hurricane and strike Florida, “it’s more of a concern for orange juice futures,” said Wachovia analyst Jason Schenker.

Light sweet crude for October delivery fell $2.16 to $70.35 a barrel on the New York Mercantile Exchange.

October Brent at London's ICE Futures exchange, which was open despite a public holiday in Britain, was down $2.17 at $70.53 a barrel.

Concern that Hurricane Ernesto would reduce supply from the Gulf of Mexico region, where oil rigs and refineries were ravaged by Hurricane Katrina this time last year, had been driving prices higher.—AFP