Oil prices slipped Wednesday as the US oil industry began to pick itself up from the blow of Hurricane Katrina and industrialised nations offered emergency stocks to offset shortages. US light crude by 1734 GMT was down $1.41 at $64.55 per barrel after Tuesday's $1.61 drop. London Brent crude shed $1.56 to $63.11 a barrel.
Prices have fallen more than $6 from a record high of $70.85 hit August 30, the day after Katrina slammed into Louisiana and Mississippi. Three of the eight oil refineries that were completely shut by Wednesday were back in operation.
About 900,000 barrels per day - about half of the amount shut by Katrina - of US refining production will be shut at the end of September, the US Department of Energy estimated in a report issued Wednesday.
The EIA also said that four of the Gulf Coast refineries have sustained "major damage" and will be off line for "a matter of months." The reduction in the amount of crude oil refined due to Katrina will be between 700,000 bpd and 1.2 million bpd during September, the EIA said.
Refiners have until Friday to submit bids for 30 million barrels of crude oil offered from US government strategic reserves.
This accounts for half of a co-ordinated release of 2 million bpd in emergency stocks by the International Energy Agency (IEA), energy watchdog for 26 industrialised nations.
"The market is paying respect to the IEA's decision to release oil reserves for the first time in 14 years," said Keiichi Sano of Sumitomo Corp's commodities unit.
But some analysts say the IEA oil rescue plan does little to address the severe shortage of gasoline in the United States.
The IEA said its members would release just under 700,000 bpd of products, with gasoline, mostly from Europe, accounting for 369,000 bpd.
Barclays Capital reckons the total cumulative loss of US gasoline could reach 60 million barrels.
"In all, we still believe that there is a very significant supply gap in gasoline," said a report by Barclays Capital.
French oil giant Total said it would resume full production at five of its French refineries on Wednesday night after reaching an agreement to end a worker's strike at the plants.
The workers' union had said it halved production at the five strike-hit plants over disciplinary action against four employees at a refinery in Province.
Germany's Chancellor Gerhard Schroeder said that $20-$30 of oil prices were due to "pure speculation," adding that policies were needed to improve transparency in oil markets and to increase energy independence from oil.
A tightly stretched global refining system and growing demand for transport fuels, led by the United States and China, have helped drive oil's 52 percent rally this year.
"I don't think we will see a big sell-off from here, because some (oil) facilities in the US will not recover in the short term," Sumitomo's Sano said.
About 57 percent of US production capacity in the Gulf of Mexico remained shut after the hurricane.
Another tropical storm is threatening eastern Florida, reminding traders that Gulf's hurricane season lasts through November.
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