Oil Prices Sink as Gustav Fears Diminish

Energy futures are falling hard and fast on the New York Mercantile Exchange Tuesday morning on reports that Hurricane Gustav caused little damage to oil and gas installations in the Gulf of Mexico.

October West Texas crude was recently down $7.50 at $107.96 a barrel, and Brent was losing $7.28 at $106.77 a barrel. Reformulated gasoline was 17 cents lower at $2.68 a gallon, heating oil was falling 18 cents at $3.01 a gallon, and near-month natural gas was down 51 cents at $7.44 per million British thermal units.

Elsewhere, energy stocks are getting pummeled early Tuesday. BP (BP Quote) was losing 5% at $54.76, ConocoPhillips (COP Quote) was sliding 3.5% at $79.60, Royal Dutch Shell (RDS.B Quote) was losing 4.5% at $66.38, and StatoilHydro (STO Quote), the Norwegian national integrated firm, was free-falling almost 9% at $27.92.

The U.S. Oil Fund (USO Quote), an exchange-traded fund that closely tracks the performance of WTI futures contracts on the Nymex, was 5.6% lower at $87.69.