Oil prices slipped on Monday following the restart of production in the Gulf of Mexico, after Tropical Storm Karen abated on Sunday and was downgraded to a tropical depression, hovering off Louisiana’s extreme south-east coast.
Brent crude dropped by 54 cents to $108.92 a barrel, while US crude was down by 70 cents to settle at $103.14, reported Reuters.
The prices started dropping this morning after the National Hurricane Center reported that the storm would likely downgrade further and move later near or over parts of south-eastern Louisiana, which allowed oil companies to resume production in the Gulf of Mexico on Monday.
The prices also dropped when Kashagan oil field in the Caspian Sea resumed production on Sunday, after the overhaul of a gas leak which halted operations on 25 September.
Investors were also worried about the US borrowing limit increase, expected to be released on 17 October, which would increase possibility of a sovereign debt default.
Oil prices also dropped with the US Government’s shutdown continuing and greater supply from Libya, Iraq and North America, which increased global oil production and could outpace demand growth.
Image: Oil prices slide after oil producers resume operations in Gulf of Mexico. Photo courtesy of freedigitalphotos.net.