Crude oil prices fell in jittery trading Wednesday after the U.S. government said it would loan oil to refiners struggling in the wake of Hurricane Katrina.
The oil from the federal strategic petroleum reserve aims to keep production of gasoline and other fuels steady. But wholesale and retail gasoline prices leaped higher nationwide.
Light sweet crude for October delivery on the New York Mercantile Exchange fell 56 cents to $69.25 a barrel. That's down from an overnight high of $70.65 per barrel.
On Tuesday, oil futures settled at $69.81. That's the highest closing price on Nymex since trading began in 1983, although still below the inflation-adjusted high of about $90.00 a barrel set in 1980.
But October gasoline futures surged by almost 20 cents to $2.67 a gallon on the Nymex. That's almost 75 cents -- or 38 percent -- higher than Friday.
Some of the knottiest issues still to be resolved will be restoring electricity to Gulf Coast pipelines and refineries. Those facilities are also suffering from flooding that could very well have left critical electric motors submerged.
Industry analysts say it will be days before a full assessment of the damage can be done.