by Daniel Rook
LONDON, Sept 7 (AFP) - Oil prices fell back on Tuesday as worries about the impact of tropical storm Frances subsided, traders said.
The price of benchmark Brent North Sea crude oil for delivery in October lost 32 cents to 40.30 dollars per barrel in late deals.
New York's reference contract, light sweet crude for October delivery, tumbled 1.09 dollars to 42.90 dollars per barrel in early trading.
The US market had been closed on Monday for Labor Day.
"Frances is not an issue any more," Investec analyst Bruce Evers said, adding there was "a greater confidence" also about production in Iraq.
Prudential Bache broker Christopher Bellew meanwhile said recent comments from the OPEC producers group predicting a fall in prices as the cartel raises output might have been partly behind the decline.
Ministers of the Organization of Petroleum Exporting Countries are due to meet at their Vienna headquarters next week to discuss output policy.
Concerns about the threat from tropical storm Frances in the Gulf of Mexico eased, though traders said disruption to import activities in the region could have an effect on weekly US oil inventory figures due out on Thursday.
"Oil prices have weakened over-night after a storm threat to US crude oil production in the Mexican Gulf subsided and the market interpreted price cuts announced (Monday) by Saudi Arabia to its European crude oil sales, as a sign of a weaker fundamental picture for oil," Barclays Capital analysts wrote in a note to clients.
Hurricane Frances, which had been downgraded to a tropical depression, was located about 30 miles (48 kilometres) southwest of Albany, Georgia, moving towards the north-northwest, according to the National Hurricane Center in Miami.
The hurricane "probably caused some precautionary close-downs (of US oil installations), and that may well translate into lower stocks again in the statistics when they come out a day late on Thursday", Bellew said.
He said oil prices were likely to rebound soon, either in response to the oil inventory figures or before then in the event of any supportive news.
Analysts at Deutsche Bank meanwhile raised their forecasts for the average price of Brent crude in 2004 to 35 dollars a barrel from 31 dollars previously, and to 30 dollars in 2005 from a previous prediction of 25 dollars.
"With 2004 set to record exceptionally strong demand growth, and with little sign of an excess global production response, the risks to oil prices still look biased to the upside," they wrote in a research note.
"The OPEC meeting on September 15 could raise the cartel's price band and encourage a yet-higher consensus floor for prices. The impact of terrorism remains unpredictable, as does the reliability of Middle East and Russian oil
supplies," they added.