NEW YORK --- Weather forecasters are now predicting that Hurricane Dean, now a Category 4 hurricane on a scale of 5, will weaken after hitting the Yucatan and pass into the southern Gulf of Mexico without causing major damage to the Gulf's oil facilities. "Dean is too far south to cause any serious problems in the U.S. in the way of disruptions to the refining system and/or to crude production," Nauman Barakat, senior vice president at brokerage Macquarie Futures USA in New York, told the Wall Street Journal. "About the only danger is that it might hit Mexico's main off-shore crude production area of Bay of Campeche" in the southern Gulf. The favorable weather forecast triggered price drops in crude oil futures today, the newspaper reported. The front-month September light, sweet crude contract on the New York Mercantile Exchange dipped $1.18 to hit $70.80 a barrel. On the ICE futures exchange, brent crude fell 84 cents to $69.96 a barrel. Dean is expected to strengthen in the next day before weakening after making landfall. Then it will likely strengthen again when it enters the Gulf.

Originally posted on Fleet Financials