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Last Updated: Tuesday, 29 August 2006, 15:49 GMT 16:49 UK
Oil below $70 as storm fears calm
Traders on the New York Mercantile Exchange
Traders had been worried over a repeat of last year' s storm damage
Oil prices have slid below $70 a barrel after news that a tropical storm is to miss oilfields in the Gulf of Mexico.

By 1500GMT on Tuesday, a barrel of US light, sweet crude had fallen 91 cents to $69.70, with London's Brent crude down 92 cents to $69.90.

The weather report outweighed the security concerns which have dogged oil markets, particularly concerning the future of Iran's nuclear programme.

But reports also suggested a looming supply shortfall from Iran.

Iran's oil ministry website said it was likely to fall 500,000 barrels a day short of its 2010 Opec output target of five million barrels a day.

Official Iranian press reports blamed low investment in older oil fields.

Nuclear concerns

The news came as Iranian President Mahmoud Ahmadinejad reiterated his demands that Iran's right to a peaceful nuclear programme should be respected.

Iran's nuclear ambitions - widely believed in the US, UK and elsewhere to include plans for nuclear weapons - have been one factor pushing oil prices up in recent months.

Prices had dipped last week after signs that Iran was prepared to advance talks on its nuclear programme, in the face of continued Western demands to suspend uranium enrichment.

In the US, Tropical Storm Ernesto now looks set to spare oil production in the Gulf of Mexico and hit southern Florida instead.

Damage to refineries, offshore rigs and pipelines from Hurricane Katrina last year pushed oil prices to new records.

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