Oil plunged in price by more than $US4 on Monday after Hurricane Gustav weakened before hitting the Louisiana coast.
More than a quarter of the refining capacity in the United States was shut or processing at a reduced rate in anticpation of its arrival.
Gustav weakened to a Category 1 storm after coming ashore near Port Fourchon, Louisiana. It was earlier forecast to make landfall as a Category 4 storm.
US crude fell $US4.24 in electronic trading to $US111.22 a barrel by 2120 GMT on Monday as markets discounted the potential damage from the storm.
London Brent crude settled down $US4.64 at $US109.41 a barrel.
Gustav was the biggest threat to the region since hurricanes Katrina and Rita wrecked more than 100 offshore oil platforms in 2005 and closed several large refineries for months.
Oil prices previously reached $US147.27 a barrel on 11 July: high fuel prices and wider economic problems have hit demand in the United States and Europe.