Oil prices lower in Asian trade as hurricane seen to bypass US refineries

SINGAPORE (Thomson Financial) - Oil prices were lower in Singapore morning trade Tuesday as Hurricane Felix looked to bypass US refineries.

At 10:36 am (0236 GMT) New York's main contract, light sweet crude for October delivery, was three cents lower at 74.01 US dollars a barrel.

Brent North Sea crude for October delivery was down 25 cents at 73.16 dollars.

Felix was not expected to track towards US oil refineries but the category five storm is a reminder to traders that September is the peak month of the Atlantic hurricane season.

"I think Felix is in the neighbourhood but it doesn't look like it will really affect US oil production in the Gulf of Mexico," said Victor Shum, a Singapore-based analyst with Purvin and Gertz energy consultancy.

"Felix is a reminder that we have just entered the peak month for the Atlantic hurricane season," he said.

Felix became the second hurricane of the Atlantic storm season on Saturday and by Monday, authorities in Honduras and Nicaragua urged coastal residents to flee for their lives as Felix headed toward central America at a potentially devastating maximum intensity.

Last month Hurricane Dean forced Mexican state-owned oil company Pemex to shut down its oil output of approximately 2.7 million barrels per day.

The oil market is also waiting the outcome of the OPEC meeting on September 11.

Twenty-one out of 23 analysts polled by Thomson Financial said the cartel was likely to keep production levels unchanged at the meeting on worries that volatility in equity markets might crimp oil demand.

At its last regular meeting in March, OPEC decided to keep its official production quota at 25.8 million barrels of oil per day.