US oil prices fell today as industrialised countries prepared to release oil from emergency stocks and some of the US refiners hit by Hurricane Katrina began to restart operations.
US crude was down 74 cents at $66.83 a barrel. London Brent added 41 cents to $65.26 a barrel after falling more than $1 on Monday when the US was closed for Labor Day.
Speculation that the aftermath of the storm could dent consumer confidence and trim US economic growth also weighed on US prices.
Japan, the world's No. 3 oil consumer, said its 7.3 million-barrel stock release would begin tomorrow and come from private commercial inventories.
This comes as part of the International Energy Agency's (IEA) total release of 2 million barrels per day (bpd) over the next 30 days, the first time the IEA has tapped its members 1.5 billion barrel government stocks since 1991.
"In the short-term it's a bit bearish as it looks like the whole world is going to move cargoes to the US," said Colin Tang, an oil trader at investment bank Calyon in Singapore.
"Much will depend on how quickly these US refineries get back on their feet," Mr Tang said.
The United States was set to begin an auction on Tuesday for crude from national reserves for refiners struggling for feedstock after Katrina shut down most Gulf of Mexico production and closed major pipelines.