SINGAPORE - Oil prices fell on Wednesday as a tropical storm hitting the U.S. Gulf coast weakened and had a lower impact on production than initially expected.
U.S. West Texas Intermediate (WTI) crude futures were at $69.14 per barrel at 0642 GMT, down 73 cents, or 1 percent, from their last settlement.
International Brent crude futures fell 60 cents, or 0.8 percent, to $77.57 a barrel.
Prices had jumped the previous day as dozens of U.S. oil and gas platforms in the Gulf of Mexico were shut in anticipation of damage from tropical storm Gordon.
However, the storm had shifted eastward by Wednesday and was weakening, reducing its threat to producers on the western side of the Gulf.
Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA, said many crude futures traders were "caught long and wrong over the past 24 hours due to the tropical storm buying frenzy", adding that "prices pulled back considerably as the magnitude of the storm suggests production losses will be limited".
A typhoon also hit Japan's east coast overnight, with some damage to oil refineries in the Osaka region, although operator JXTG said its operations were not significantly affected.
Innes said the price outlook for crude was still bullish, in large part because of U.S. sanctions targeting Iran's oil sector from November.
"With the anticipation of up to 1.5 million barrels per day affected by the U.S. sanctions on Iran, one would expect prices to move higher in the weeks ahead."
Other voices, however, cautioned on the risks to oil demand if turmoil in emerging markets starts hitting economic growth.
"My sense is that the big issue going forward, if this emerging market crisis morphs into something more troubling, is not just (oil) demand growth but total demand," said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
Emerging markets are a key driver of global oil demand growth, but several of them - especially Turkey and Argentina but also Indonesia and South Africa - have seen their currencies and stock markets come under pressure in recent months amid inflation, a strong U.S.-dollar and escalating global trade disputes.
"If emerging markets get worse ... that will impact crude markets," he said.
Striking a balance between maximising revenue and keeping a lid on prices in order not to stall demand, top crude exporter Saudi Arabia is managing its own supply with a goal to keep crude prices in a range between $70 and $80 per barrel, OPEC and industry sources told Reuters this week.