Oil prices leapt a dollar today, recovering from deep losses the previous session, as traders kept a nervous eye on the latest hurricane to threaten key US offshore facilities.
US light sweet crude for August delivery was trading $1.10 higher at $58.90 after yesterday's more than $2 fall that took the New York Mercantile Exchange (NYMEX) to its lowest closing price for two weeks.
London Brent crude for September was also $1 higher at $57.96 a barrel.
Hurricane Emily missed OPEC member Venezuala's oilfields and forecasters said it looked likely to avoid the US Gulf of Mexico, home to about a quarter of domestic output.
But the early arrival of a succession of storms stoked worries about supplies there with several months to go until the end of the traditional hurricane season.
Last week's Hurricane Dennis briefly shut most oil and gas output, but companies were quick to restart operations.
Oil prices have fallen more than $3 from their $62.10 a barrel peak on July 7th.
Losses accelerated this week after US data showed a bigger than expected increase in stocks of distillates, the high-demand fuel group that includes heating oil and diesel.
Stockpiles that were pulled to below-average levels by exceptionally robust summer demand are back in the upper half of their average range, the US government said.
This should give traders slightly more confidence about refiners' ability to meet demand this winter, when consumption spikes in northern hemisphere countries, although many still worry about tightness in refining capacity.
Crude stocks fell by 3.9 million barrels, more than forecast, but remained near the top end of their average range.
Market bulls were also unnerved this week by a downgrade in oil demand expectations by the International Energy Agency (IEA), energy watchdog for 26 industrialised nations.
The IEA cut its growth forecast this year by 200,000 barrels per day (bpd) to 1.58 million bpd as high prices were expected to curb consumption in China and the United States, whose expansion last year helped to drive prices beyond $50 a barrel for the first time.