WTI drops more than $5, closes below $96 per barrel

Crude oil prices were more than five dollars per barrel lower Monday after Lehman Brothers (NYSE: LEH) had to declare bankruptcy in the absence of a viable buyer or a government bailout.

Prices were also down as it appeared that damage to the oil infrastructure in Texas and the Gulf of Mexico had not suffered widespread damage from Hurricane Ike’s wind, rain and flooding over the weekend.

West Texas Intermediate crude for October delivery was down $5.47 to $95.71 per barrel on the New York Mercantile Exchange, the first close under $100 per barrel in New York since early March, while at last report October contracts for Brent crude was $5.10 lower to $92.48 per barrel on the ICE Futures Europe exchange at last report.

In afternoon trade, Nymex October gasoline was 19 cents lower to $2.58 per gallon while October heating oil had fallen 12 cents to $2.82 per gallon, but October natural gas had gained 2 cents to $7.61 per million British thermal units.

Government officials said Sunday that 10 oil and gas platforms in the Gulf of Mexico were destroyed by the storm and some pipelines had been damaged, but that was only a small proportion of the approximately 3,800 platforms currently active in the Gulf.

In addition, some refineries in the region were still awaiting startup due to lack of electric power, but some were already preparing to resume production.

At-the-pump gasoline prices were up a half-cent overnight to $3.84 per gallon on average nationally and there were predictions that pump prices would remain up in the US for the rest of the month before settling back to pre-storm levels.

News that there has been more violence directed at oil facilities in Nigeria did not seem to have affected prices.