world oil prices at 126 dollars

“The market was driven lower by reduced risk from hurricane Dolly as it moves through a relatively clear part of the Gulf of Mexico, shutting in 60,000 barrels a day of Mexican production but leaving US production unaffected,” said analysts at John Hall Associates in a research note to clients.

Hurricane Dolly gained force in the Gulf of Mexico Wednesday as it headed for the US-Mexican border, forcing thousands to flee their homes as US oil rigs put staff ashore.

Packing sustained winds of 140 kilometres (85 miles) per hour, the first hurricane of the season in the gulf was about 105 kilometres southeast of the Texas border town of Brownsville, the US National Hurricane Center said.

The storm was moving northwest at 13 kilometres an hour (eight mph), the centre said at 0900 GMT.

Some oil drilling companies in the area have evacuated personnel from their offshore rigs as a precaution.