Oil prices have closed narrowly mixed amid a near-total shutdown of offshore rigs in the Gulf of Mexico, where a massive Hurricane Ike was bearing down deep in the heart of the US oil industry.
In choppy trade, the market also watched signs of further financial stress in the United States that pushed Lehman Brothers, the venerable Wall Street investment bank, to the brink of collapse. The US government reportedly was racing to find a buyer.
New York's main contract, light sweet crude for delivery in October, rose 31 cents to close at $US101.18 a barrel.
About an hour earlier, the New York contract briefly dipped to $US99.99, crossing the psychological $US100 threshold for the first time since April 1.
In London, Brent North Sea crude for October dipped 6 cents to settle at $US97.58.
Brent dropped below $US100 on Tuesday for the first time since April 2.
In a precipitous decline, crude oil prices have shed about $US50 from record peaks above $US147, on July 11.
US weather forecasters said that Hurricane Ike's path made it likely the powerful storm will spare the Gulf oil facilities that produce about a quarter of US crude oil.
According to the US Department of Energy, 97 per cent of crude oil production in the area has been shut in - representing 1.3 million barrels per day - has been shut in and workers have been evacuated from offshore oil rigs ahead of the storm's arrival.
The hurricane could make landfall late Friday or early Thursday, the National Hurricane Centre said.
The huge storm is expected to produce a storm surge that will flood the Texas coastal city of Galveston, a refinery hub that has about a quarter of US refining capacity.
"The storm surge could be as high as 20 feet (6 metres), with the potential to inundate multiple refinery installations," said Mike Fitzpatrick, analyst at MF Global.
"The tsunami that has overtaken the credit markets is about to swallow Lehman Brothers and possibly Washington Mutual, as well. This will certainly revivify the grim economic picture in participants' minds, as it ponders oil demand growth going forward," he said.
Oil consumption in the United States, the world's largest energy consumer, fell 3.8 per cent over the past four weeks compared with the same period in 2007, while petrol consumption fell 2.1 per cent, according to DoE data.
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