More than 20 percent of U.S. oil refining capacity was shut, limiting fuel deliveries and prompting the Department of Energy to release 309,000 barrels from its emergency stockpiles. Refiners reported no major damage after Ike struck the Houston area, and said preparations are under way to restart plants.
``The oil sector has escaped a nightmare scenario here,'' said Rob Laughlin, senior broker at MF Global Ltd. in London. ``There has been very little structural damage to onshore oil operations and I expect production to start cranking up during the week.''
Crude oil for October delivery fell as much as $3.41, or 3.4 percent, to $97.77 a barrel in electronic trading on the New York Mercantile Exchange, the lowest since Feb. 25. The contract was at $98 at 9:37 a.m. in London. Prices are up 22 percent from a year ago.
Gasoline for October delivery fell as much as 14.71 cents, or 5.3 percent, to $2.6225 a gallon in New York. The contract was at $2.6430 at 9:24 a.m. in London. New York Mercantile Exchange electronic trading opened early yesterday to allow traders to respond to Ike.
Oil also fell on speculation that the U.S. economy is slowing, reducing demand for fuels. The concern was heightened by Lehman Brothers Holdings Inc.'s bankruptcy filing after potential buyers abandoned talks to buy the securities firm.
Texas, Louisiana
Crude has declined 33 percent from a record $147.27 a barrel on July 11 as high prices and slowing global economic growth reduce energy demand.
A total of 14 Texas and Louisiana refineries, with combined crude processing capacity of 3.57 million barrels a day, are shut because of Ike.
Brent crude oil for October settlement fell as much as $3.13, or 3.2 percent, to $94.45 a barrel on London's ICE Futures Europe exchange. It was trading at $94.60 a barrel at 9:29 a.m. in London. Prices have tumbled 13 straight days.
Valero Energy Corp., the largest U.S. refiner, said it found ``no significant structural damage'' at three Houston-area refineries shut before the storm.
Exxon Mobil Corp. said its Baytown refinery, the largest in the U.S., has power and damage appears ``limited,'' while it is checking its Beaumont, Texas, plant, which is without power.
Royal Dutch Shell Plc said it was assessing its Texas plants and it was too early to say when they will restart.
Assessing Plants
ConocoPhillips said its Sweeny, Texas refinery has power and its condition is being assessed. LyondellBasell Industries' Houston refinery will be down for at ``least several days,'' said David Harpole, a company spokesman. Marathon Oil Corp. and Motiva Enterprises LLC said they were evaluating their plants.
Hedge-fund managers and other large speculators cut their net-long position in New York crude-oil futures in the week ended Sept. 9, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 6,336 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions fell by 7,995 contracts, or 56 percent, from a week earlier.
