Oil prices fluctuated Wednesday after OPEC said it would reduce output by 520,000 barrels per day (bpd) and the U.S. government reported larger-than-expected declines in crude and gasoline supplies. The Energy Information Administration (EIA) said in its weekly petroleum-inventory report that crude supplies fell by 5.9 million barrels last week and that gasoline stockpiles fell by 6.5 million barrels. However, inventories of distillates - including diesel, heating oil, and jet fuel - fell by a smaller-than-expected 1.2 million barrels. The EIA report also said U.S. refineries were running at a low 78.3 percent of their capacity last week. Meanwhile, the U.S. Interior Department's Minerals Management Service said that as of Tuesday, about 77.5 percent of oil production and about 64.8 percent of natural-gas production in the Gulf of Mexico remained closed as Hurricane Ike approaches the Texas coast. Oil and gas operators have been working to restore production since they prepared for Hurricane Gustav two weeks ago. Light sweet crude oil for October delivery was down nearly $1 to above $102 a barrel in morning trade on the New York Mercantile Exchange, after initially jumping on the EIA report. On Tuesday, the contract fell by more than $3 a barrel to the lowest closing price since April 1.
