Crude futures down despite storm worries as Saudi Arabia abandons quotas

Crude oil prices fell on Tuesday despite continuing worries that another storm could soon hit production facilities in the Gulf of Mexico, threatening yet another supply disruption.

Brent crude for November delivery had gained nearly $4 on Monday, but dropped Tuesday by $1.41 to $64.20 per barrel on the International Petroleum Exchange in London.

October contracts for West Texas Intermediate crude on the New York Mercantile Exchange fell $1.16 to trade at $66.23 per barrel at the close of trade after having gained over $4 on Monday.

Gasoline and heating oil futures fell as well. After going up more than 10 percent on Monday, October Nymex unleaded gasoline dropped 9.77 cents to $1.9450 per gallon on the day. Meanwhile, October Nymex heating oil fell 8.84 cents to $1.9500, also after a 10 percent gain in price on Monday.

Traders paid little attention to an announcement from the Organization of Petroleum Exporting Countries that it would pump as much crude oil as possible in order to get prices down, effectively suspending its quota system for the first time since 1990.

OPEC is already producing at a 25-year high rate.

The announcement is seen largely as a good-will gesture, as the only OPEC nation with any spare production capacity at the current time is Saudi Arabia.