(EnergyAsia, September 16, Tuesday) — Worries over the failing health of the world economy outweighed all concerns with oil supplies, sending US crude futures plunging well below US$95 a barrel on Monday to their lowest level in seven months.

After a desperate weekend begging for help, Lehman Brothers failed to find a buyer and filed for bankruptcy protection while Merrill Lynch agreed to be bought over by Bank of America. The collapse of the world economy is now the lead concern for investors as they sold off their positions in oil.

US crude fell more than $7 to just over $94 per barrel, having cracked the previously well defended $100 briefly last Friday for the first time since early April.

The succession of killer hurricanes Gustav and Ike failed to lift oil as the worst weather to strike the US Gulf Coast since August 2005 narrowly missed destroying oil and gas infrastructure. There was extensive and serious damage to refineries, pipelines and production infrastructure, but not the extent as feared had either hurricane struck a direct hit.

Still, fuel prices rose, causing motorists in North America to accuse the oil companies of price gouging. Motorists could not understand how sharply falling crude prices were accompanied by fast rising prices at the pumps.

The US Department of Energy (DOE) reported that Ike shut down 15 oil refineries with a total capacity of 3.861 million b/d as well as closed down 30 major natural gas processing plants with a total capacity of 14.55 billion cubic feet per day in the Gulf of Mexico. The refineries represented just under a quarter of US fuel production capacity.