Oil dipped in early trade as investors liquidated their holdings in oil futures after a further slide in stock prices overnight and fears eased that a hurricane could hit the Gulf of Mexico.
At 9.51am, London's benchmark Brent crude contracts for September delivery, which expire today, were down $1.55 at $70.09 per barrel. Contracts for October delivery were down $1.51 at $70.45.
New York crude contracts for September delivery were down $1.24 to $72.09 per barrel, pressuring Asian stock markets lower overnight and sparking a softer opening on the major European bourses.
Prices have been further pressured by reports that Tropical Storm Dean, which is widely expected to become the first hurricane of the season, is likely to miss key oil facilities in the Gulf of Mexico.
The crisis in the financial markets is all but overshadowing more fundamental news, analysts said.