Oil drops below $70

…The U.S. government also said it was ready to make emergency oil loans from the nation’s Strategic Petroleum Reserve to refineries, if necessary, to help offset any loss from Mexico, which supplies 13 percent of U.S. imports.

But analysts said the threat of lasting damage was more limited in Mexico than in the U.S. portion of the Gulf.


“I think they’re not as vulnerable as the facilities in the U.S. Gulf, where production is way offshore and in deeper water. And in Mexico, there’s no refining capacity at risk,” said Tony Nunan, a risk manager at Mitsubishi in Tokyo.

The oil market is also watching financial markets for signs of more turmoil that could spur a further sell-off of oil positions by investors to raise cash amid a credit squeeze on account of the U.S. subprime mortgage crisis.

CNN