Oil raises above $69 despite US crude reserve opening

Oil prices clawed back above $69 on Thursday as worries over the loss of Gulf of Mexico refining output after Hurricane Katrina outweighed the comfort to refiners of a U.S. government crude loan.

The United States offered to lend refiners crude from its strategic reserve and temporarily eased environmental fuel regulations in an effort to head off shortages, but dealers were unconvinced the measures would rein in record fuel prices.

U.S. crude traded 24 cents higher at $69.18 a barrel by 0751 GMT, after ending 87 cents weaker on Wednesday. Prices were $1.67 a barrel below record-highs of $70.85 hit on Tuesday. London Brent crude was up a cent at $67.03 a barrel, reports Reuters.

If Bush had opened up some of the reserves earlier and pressured Saudi Arabia to boost production, prices today would be far more manageable, said Representative Edward J. Markey, a Malden Democrat.

"For months the White House has turned a blind eye to the concerns of Americans, letting the oil industry tip consumers upside down and shake money from their pockets," said Markey, a senior member of the House Energy and Commerce Committee, informs the Boston Globe.

Bush appeared in the Rose Garden late yesterday afternoon with members of his Cabinet, seeking to assure the public that the administration is doing what it can to control gas prices.

"A lot of crude production has been shut down because of the storm. I instructed Secretary Bodman to work with refiners, people who need crude oil, to alleviate any shortage through loans," Bush said. "This will help take some pressure off of gas prices. But our citizens must understand this storm has disrupted the capacity to make gasoline and distribute gasoline."