Oil prices drops for second da

Crude oil prices plummeted for a second straight day Wednesday as supply worries eased and the government forecasted that the high gasoline prices would fall soon.

Light sweet crude futures for October deliveries fell 1.59 dollars to close at a three-week low 64.37 dollars a barrel on the New York Mercantile Exchange, after hitting an intraday low of 63.90 dollars a barrel, as the market reacted to a faster-than-expected recovery of oil operations in the Gulf of Mexico after Hurricane Katrina. Gasoline futures dropped 16.17 cents to 2.0222 dollars per gallon.

The Energy Department's statistical agency, the Energy Information Administration (EIA) said Wednesday that US oil production and refinery output should return to pre-hurricane levels by November.

EIA claimed that it sees US retail gasoline prices falling to 2.58 dollars a gallon in the fourth quarter. The administration alsoslashed its forecasts for growth in US oil demand this year and next, saying higher costs would deter consumption.

Four of the 10 refineries that were shut down are expected to be back at full capacity within the next week and six refineries that had to scale back production were expected to be back at fullcapacity by Thursday, EIA director Guy Caruso said, testifying before a House committee examining the energy impacts of Hurricane Katrina.