Crude prices drop after early gains

After gains early in the session, crude oil prices ended lower Thursday after the International Energy Agency said it would dip into its emergency reserves to keep supplies flowing if Tropical Storm Gustav regains hurricane strength and damages key oil facilities in the Gulf of Mexico.

As many as 4,000 oil and gas facilities are located in the Gulf, and some projections have Gustav headed for the thickest concentrations of these offshore platforms.

In addition, there are a number of oil refineries located on the Gulf Coast in Texas and Louisiana that could be damaged if Gustav makes landfall as a hurricane.

Several oil companies have already begun evacuating workers from their offshore facilities.

After going above $120 per barrel, West Texas Intermediate crude for October delivery was down $2.60 to $115.55 per barrel at the close of floor trade on the New York Mercantile Exchange while Brent crude dropped $2.22 to $114 per barrel on the ICE Futures Europe exchange in London.

Earlier in the day, Nymex September gasoline dropped 7 cents to $3 per gallon and October heating oil fell 10 cents to $3.18 per gallon.

Nymex October natural gas futures were down 72 cents to $7.89 per million British thermal units after the US Energy Information Administration reported that natural gas inventories added 102 billion cubic feet to 2.575 trillion cubic feet last week, a much larger gain than had been anticipated.