Oil prices rose today after steep losses earlier in the week as US production recovered more slowly than expected after a battering from Hurricane Katrina.
US light crude edged 22 cents higher to $64.71 a barrel this morning, extending a gain of 12 cents yesterday. Prices are still down 8 per cent from a record-high of $70.85 last week. London Brent crude rose 30 cents to $63.38 a barrel.
The slowdown in the US industry recovery underscored fears that tighter fuel supplies might last months, leading to higher energy prices in the world's top consumer in the run-up to peak winter demand.
About 5 per cent of US oil refining capacity may remain offline for several months after the storm shut down 10 per cent of refining capacity, the US energy department said.
It said four refineries are likely to be down for an extended period. These help supply the pipelines that ship fuel to US east coast markets. It is unclear how easily increased gasoline imports from Europe will be put into this distribution system.
The International Energy Agency (IEA) is co-ordinating the release of two million barrels per day (bpd) over 30 days in emergency stockpiles, though 1.3 million bpd will be crude rather than much needed gasoline.
The IEA rescue plan may also be hampered by tanker shortages as an armada is sending supplies to the United States. US oil supplies have been drained as companies tapped stocks to make up for lost output and closed ports.
Crude stockpiles fell 6.4 million barrels to 315 million barrels in the week ended September 2nd, the lowest since March 25th, though the decline was in line with analysts' expectations.
Gasoline inventories dropped 4.3 million barrels to 190.1 million barrels, the lowest since November 2000, though this was less than an expected 6.2 million-barrel fall.