* 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, updates Gulf of Mexico production volumes shut and
U.S. considering asking IEA for emergency fuel release)
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 the storms hit
refinery production. The Department of Energy said it was
considering asking the International Energy Agency to release
emergency fuel supplies due to the crunch. []
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, nearly 96 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 more 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 kept a close eye on financial markets, 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 David Gregorio)
