NEW YORK, 8 September 2005 — Crude oil futures tumbled to a three-week low in New York yesterday as the market reacted to a faster-than-expected recovery of oil operations in the Gulf of Mexico after Hurricane Katrina.
On the New York Mercantile Exchange, light sweet crude futures for October deliveries fell $1.59 to close at $64.37 a barrel. Gasoline futures, which have been near record highs, dropped 16.17 cents to $2.0222 per gallon (3.78 liters).
Three oil refineries on the US Gulf Coast, battered by Katrina on Aug. 29, were restarting operations and another four were expected to do so soon, the Department of Energy said Tuesday.
Offshore oil drilling in the Gulf of Mexico, which normally supplies a quarter of US crude, was improving also, the federal Minerals Management Service said. “We still expect the market to be supported by continued uncertainty from what the longer term effects of the hurricane may be and whether there will be any more major hurricanes this season,” Sucden analyst Sam Tilley said.
A day after Katrina struck, New York’s main contract hit a record-high $70.85 per barrel, while in London Brent reached an all-time high $68.89 — leaving prices double the levels in 2003. Prices have since plunged, owing largely to the United States and its industrial partners agreeing to tap emergency reserves.
The International Energy Agency (IEA) had said last Friday that its members would release 60 million barrels of crude products over an initial period of 30 days.
