* Several offshore U.S. oil platforms toppled by Ike
* U.S. crude stocks drop, gasoline lowest level on record
* U.S. stock markets and dollar slide
(Recasts lead, updates prices)
By Richard Valdmanis and Rebekah Kebede
NEW YORK, Sept 17 (Reuters) - Oil prices shot up $6 on
Wednesday, the largest one-day percentage gain in three months,
as a U.S. government report showed nationwide energy
inventories fell in the aftermath of the Gulf Coast hurricanes
and the greenback slid against the euro.
The gains followed the steepest two-day sell-off in the oil
market in four years which came as mounting economic turmoil in
the United States sent investors fleeing to safer havens like
bonds and gold.
"Crude oil prices have rebounded, having fallen sharply to
near $90. At that level, I think the bear market near-term
correction has run its course. Prices are also up on low
petroleum inventories and on the prospect that they may even go
lower in coming weeks," said Tom Knight, a trader at Truman
Arnold in Texarkana, Texas.
U.S. crude oil prices <CLc1> settled at $97.16 a barrel, up
$6.01, while London Brent crude oil <LCOc1> settled at $94.84 a
barrel, up $5.62.
The gains came after the U.S. Energy Information
Administration reported a larger-than-expected decline in
domestic crude oil inventories of 6.3 million barrels as
hurricanes Gustav and Ike slashed production and imports.
[]
The EIA report also showed U.S. gasoline inventories fell
last week to their lowest level on record as refinery
production took a hit from the storms.
Oil companies were working to restore operations in the
Gulf of Mexico and along the Gulf Coast after the latest
hurricane, Ike, slammed into Texas last Saturday and shut down
a quarter of the nation's energy output.
As of Wednesday morning, more than 97 percent of the Gulf
of Mexico's oil production was still shut and a dozen
refineries along the coast, representing a fifth of U.S. fuel
production, remained off line. []
Oil received additional support when the euro rose to a
session high against the dollar after breaking a key technical
level, forcing investors who had bet against the single zone
currency to buy euros to prevent further losses. []
Traders were keeping a close eye on financial markets,
however, as U.S. stocks slid due to a spike in interbank
lending rates and on concerns the U.S. government rescue of
insurer American International Group <AIG.N> would not stem the
turmoil that has rocked markets this week. []
"We expect markets to remain volatile for at least the next
few days until people start to refocus on oil market
fundamentals," said Helen Henton, head of commodities for
Standard Charter in London.
Oil prices are down more than third since peaks above $147
a barrel in mid-July as high energy costs and economic woes cut
deeply into fuel demand.
Fresh attacks on Nigerian oil installations also provided
some support to the market Wednesday. []
(Reporting by Richard Valdmanis and Rebekah Kebede, additional
reporting by Jane Merriman, David Sheppard, and Matthew
Robinson in London and Annika Breidthardt in Singapore, editing
by Jim Marshall)
