Oil climbed back above $68 on Tuesday as traders waited for news of damage in the wake of Hurricane Katrina's rampage through the Gulf of Mexico.
Gasoline and heating oil futures, which led the oil market's rally on Monday to touch all-time highs above $2 a gallon, outpaced crude again as dealers feared refinery outages or delays in crude shipments would squeeze already tight supplies.
Oil prices rose to a record-high at $70.80 a barrel early on Monday but slashed gains to just over $1 as Katrina, one of the biggest hurricanes in US history, eased before hitting the coast. It has since slowed to a tropical storm.
US crude rose 92 cents, or 1.4 per cent, to $68.12 a barrel today as operators began to assess the extent of Katrina's destruction after it churned through the Gulf, which pumps a quarter of US oil and gas.
London Brent crude, resuming trade after Monday's holiday, leapt $1.88 a barrel to $66.75, catching up with New York gains.
More than 90 per cent of the Gulf of Mexico's oil output was shut as a precaution, the US Minerals Management Service said.
That closed down 1.4 million barrels per day (bpd) of output, roughly 7 per cent of US domestic demand and about the same amount as the estimated spare capacity held by the Organization of the Petroleum Exporting Countries (OPEC).
The global oil industry can ill afford a lasting disruption in supplies to the world's top consumer as most producers and refiners around the world have been working flat-out to meet two years of exceptionally strong demand growth.
The US Coast Guard said it had received reports of oil platforms adrift in the Gulf, but operators had not yet been able to survey the full extent of the damage.