Friday, August 4 2006 14:06 Hrs (IST) - World Time -

New York: World oil prices fell as concerns eased about a tropical storm off the US Gulf Coast, where hurricanes last year damaged many oil rigs and platforms," traders said.

Market nerves were also soothed by comments from British Prime Minister Tony Blair arguing that an agreement to end the conflict in Lebanon between Israeli and Hezbollah forces could be only days away.

New York's main contract, light sweet crude for delivery in September, dropped 35 cents to close at 75.46 dollars a barrel.

In London, Brent North Sea crude for September delivery lost 33 cents to settle at 76.56 dollars a barrel.

It was the first fall in four days following gains of 4.8 per cent in London and 3.5 per cent in New York between Monday and Wednesday.

Crude futures had spiked on Wednesday as traders fretted over the hurricane threat in the Gulf of Mexico. Oil prices reached 77.47 dollars a barrel in London and 76.50 in New York the highest levels since July 18.

"But crude futures fell on diminished concerns that Chris would become a hurricane and directly threaten the infrastructure industries", Wachovia Securities economist" said Jason Schenker.

The National Hurricane Center in Miami said that Tropical Storm Chris had weakened north of Puerto Rico, and was on the verge of being downgraded to a tropical depression.

Last year's record-breaking Atlantic season saw 28 named storms, including 15 that became hurricanes.