Crude oil prices ease below US$70

02-Sep-05

Oil and gasoline prices eased as the U.S. government attempted to avert a fuel shortage, but markets remained near peaks as the damage from Hurricane Katrina in the Gulf of Mexico could take months to repair. Crude oil prices on the NYMEX eased to below US$70 levels at US$69.35 a barrel, having hit an all-time high US$70.85 a barrel on Tuesday, one day after Katrina hit the coast. Steps taken by Washington include: loaning out emergency crude supplies, easing environmental regulations on motor fuels and waiving a shipping law to allow better flow of oil into the Gulf region, where most oil output and eight refineries were still out of commission. All these steps, however, cannot salvage the situation entirely, as Katrina has struck at the heart of an industry already running nearly flat-out to satisfy two years of exceptionally strong global demand growth.