WTI drops below $100 per barrel before slight gains

October contracts for West Texas Intermediate crude dropped to $99.99 per barrel briefly on the New York Mercantile Exchange Friday, the first time it has been below $100 per barrel since 2 April, before returning to slight gains on the session in afternoon trade.

New York prices avoided huge gains and Brent crude for October delivery had fallen 23 cents at last report to $97.41 per barrel even though Hurricane Ike is threatening offshore platforms in the Gulf of Mexico and refineries in Texas on reports that fuel demand in the United States dropped by 5.6 percent in June from a year earlier.

This, even though 98 percent of crude oil production and 94 percent of natural gas production in the Gulf remained closed Friday ahead of the storm and refineries in the path of the storm were ramping down operations.

The possible impact of the storm on refineries, which could be closed for an extended period if Ike does much damage to them, sent wholesale prices for gasoline higher, mostly in the Gulf Coast region.

However, wholesale gasoline prices were also up to a lesser degree in US cities far from the storm’s target region considering that 20 percent of US refining capacity is clustered around the Houston, Texas, area and the Texas Gulf Coast as a whole is home to 25 percent of US refining capacity.

October contracts for West Texas Intermediate crude closed up 21 cents to $101.08 per barrel on the New York Mercantile Exchange.

Nymex October gasoline futures were up a cent and a half to $2.76 per gallon while October heating oil added 1 cent to $2.92 per gallon and October natural gas gained 13 cents to $7.38 per million British thermal units.