Oil prices eased below $69 today after the United States decided to loan crude from its strategic reserves in the wake of Hurricane Katrina
The United States also temporarily eased environmental fuel regulations in an effort to head off shortages, but dealers were unconvinced the measures would rein in record fuel prices.
US crude traded 14 cents lower at $68.80 a barrel by early this morning, after ending 87 cents weaker last night. London Brent crude shed 32 cents at $66.70 a barrel in electronic trade.
Gasoline futures on the New York Mercantile Exchange jumped 4.48 cents or 2 per cent to $2.3001 a gallon in the new front-month October contract, after September gasoline hit record highs and expired a hefty 14 cents up on Wednesday.
As much as 20 million to 40 million barrels of refinery throughput could be lost as the storm damage is repaired, including 14 million to 28 million barrels of gasoline, Barclays Capital estimates. That would further drain motor fuel stockpiles that already stand 7 per cent below last year's levels.
Hurricane Katrina has shut down nine refineries in the region, straining an industry that has been working nearly flat out this year to satisfy growing demand for consumer fuels.
It also shut 91 per cent of the normal 1.5 million barrels per day f Gulf of Mexico crude production and 83 per cent of the normal 10 billion cubic feet of natural gas output.