Oil prices extended their decline Wednesday as the dollar strengthened against major currencies and traders waited for Gustav damage reports.

Oil futures tumbled more than $7 a barrel on Tuesday after Hurricane Gustav hit the Gulf region with less force and apparently less damage than initially feared. Prices were also pulled lower by a strengthening dollar and a return to concerns that an economic slowdown has crippled demand for energy.

As Hurricane Gustav neared the Gulf coast Monday, oil prices fell after spiking more than $3 on Sunday as the world oil market waited for the potentially devastating storm to come ashore.