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LONDON (AFP) - Crude oil prices fell further on Tuesday as Hurricane Dean remained on course to avoid hitting vital energy facilities in the US Gulf of Mexico.The price of Brent North Sea crude for October delivery dropped 26 cents to 69.59 dollars per barrel.

New York’s main futures contract, light sweet crude for delivery in September, fell 43 cents to 70.69 dollars per barrel.

“Crude futures were still lower, extending last night’s losses on news that Hurricane Dean would not hit major oil facilities in the Gulf of Mexico,” said Andrey Kryuchenkov, analyst at the Sucden brokerage in London.

“Hurricane Dean reached its maximum strength and was upgraded to Category 5 hurricane, with winds approximately at 160 mph (miles per hour).

“However, it is expected to calm down and weaken before moving into the Bay of Campeche in Mexico,” Kryuchenkov added.

Dean was heading for Mexico with monstrous force on Tuesday ahead of landfall expected within hours, after strengthening into a “potentially catastrophic” category five hurricane.

The International Energy Agency said Tuesday that it was slightly concerned about the impact on local oil production when Hurricane Dean hits Mexico — but believed its passage will not affect global oil markets.

“What could worry us a bit is that it will pass over Mexican production,” William Ramsay, the deputy executive director of the IEA told French radio FM.

“We are not very worried from the point of view of the global market” even if there are “tensions on the market due to the insufficiency of refining capacity and limited production by OPEC,” he said.

He said of the two million barrels a day produced offshore in Mexico, “1.5 million barrels a day is on the route of the hurricane.”

The IEA, an organisation which defends the energy interests of the industrialised countries, has repeatedly called for the Organization of Petroleum Exporting Countries (OPEC) cartel to pump more crude.

But the 11-nation OPEC cartel, which holds its next output meeting in September, has resisted the calls to ramp up production.

Elsewhere, traders were cautious about choppy global stock markets.

“Oil investors are keeping a close watch on developments in global equity markets for signs of more turmoil,” Kryuchenkov added.

“Uncertainty remains and market participants fear there is room for more liquidation if concerns over the credit market persist and we see more indications that the subprime crisis could spread into a broader economy.”

Traders are concerned that slowing global growth could dampen world demand for crude oil.