LONDON, July 22: Oil prices tumbled to six-week lows on Tuesday as Tropical Storm Dolly looked set to avoid refineries and rigs in the Gulf of Mexico, traders said.

New York’s main contract, light sweet crude for August delivery, dived $4.63 to $126.41 a barrel.

It earlier hit a low of $125.63, a level last seen in early June during its ascent to a historic high of $147.50 set on July 11.

Brent North Sea crude for September slumped $4.35 to $128.26.

“We’re seeing the reaction to the storm not being a factor at all in Gulf production,” said Paramount Options president Ray Carbone, quoted by Dow Jones Newswires.

The market had rebounded on Monday after falling by more than $16 last week, as Dolly moved into the Gulf of Mexico and the international community tightened pressure Iran to halt its nuclear programme.

Forecasters issued a hurricane warning on Tuesday as Dolly churned over the Gulf of Mexico and threatened to land as a Category One storm near the US border with Mexico.

Some, but not all oil drilling companies evacuated personnel from their offshore rigs as companies waited to see where the storm would make landfall, the Houston Chronicle reported.

“The first storm in (the season) always gets the adrenaline pumping and it helps bring everybody into the mind set for hurricane season,” said BP spokesman Tom Mueller in a Houston Chronicle report.

BP has not evacuated workers nor halted production in the Gulf, it added.

Around one quarter of US domestic crude production and 15 per cent of natural gas output comes from the Gulf of Mexico.—AFP