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WASHING TON -- Crude oil prices have fluctuated between its seventh month low of $90.51 and more than $100 this week, due in part, to the severe hurricane season sweeping the Gulf Coast region, Bloomberg News reported.
"The weaker greenback and new supply risks around the world are reviving the oil price," Eugen Weinberg, a commodity analyst at Commerzbank AG in Frankfurt, told Bloomberg News. "We saw during the first wave of the credit crisis that people consider oil and gold to be safe havens and they may be doing the same now."
According to the New York Mercantile Exchange, oil for October delivery rose as much as $5.08, or 5.2 percent, to $102.24 a barrel yesterday before falling into double digits later in the day.
"The key issue of the moment is whether the oil price sell-off should now be considered an over-correction. We don’t think it should," Dresdner Kleinwort Group Ltd. analyst Gareth Lewis-Davies said in a recent report. "Both market fundamentals and financial issues should continue to combine to weaken prices over the rest of this year."
Bloomberg reported U.S. crude-oil stockpiles fell 6.33 million barrels to 291.7 million barrels last week, marking the fourth straight inventory decline.
In response to the flattening market—and with 12 oil refineries still shut along the U.S. Gulf Coast, which represent roughly 1.1 million barrels a day in lost gasoline production—the Bush administration is considering asking the International Energy Agency (IEA) to release emergency gasoline and diesel fuel to the United States, reported Reuters.
"It would be to provide refined products," U.S. Energy Secretary Sam Bodman told Reuters. "The real need on a macro basis, from the country’s standpoint, is the
availability of refined product, gasoline and diesel, but largely gasoline."
As of Wednesday, the IEA was in the process of analyzing the United State’s energy infrastructure damage, Reuters reported. The agency stated that there was "no imminent decision at this time."
"We ought to do everything we can to ensure the supply of gasoline to the American economy is not disrupted," AAA spokesman, Geoff Sundstrom, told Reuters. "We need gasoline where ever we can find it."
According to the Energy Information Administration, the national average price for regular gasoline over the past week was $3.84 a gallon.