Oil plummets as Ike largely spares energy output

New York: Oil prices plunged to a seven-month low Monday as the Gulf Coast energy infrastructure appeared relatively unharmed after Hurricane Ike and traders bet that Lehman Brothers' bankruptcy could ignite a massive liquidation of commodities.

Light, sweet crude for November delivery fell $4.87, or 4.82 per cent, to $96.38 a barrel on the New York Mercantile Exchange, after earlier dropping to $94.41, the lowest level since Feb. 14. A close at that level would be oil's first settlement under $100 since March 4.

Crude has fallen more than $50 - or 35 per cent - from its all-time trading record of $147.27 reached July 11 as a global economic slowdown continues to weigh on demand for energy.

US officials said Sunday that Ike destroyed at least 10 oil and gas platforms and damaged pipelines in the Gulf of Mexico. But that represents only a small portion of the 3,800 production platforms in the Gulf and pales in comparison to the catastrophic damage to energy infrastructure doled out by Hurricanes Katrina and Rita three years ago.

"Fears of widespread refinery damage have been allayed considerably and a number of facilities are coming back up in a timely fashion," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Illinois.

Still, power outages along the Gulf Coast were slowing efforts to restart some refineries. Valero Energy Corp. said only one of its closed refineries had power, and spokesman Bill Day said he couldn't estimated how long it would take to resume production.