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Oil prices slip further as Gulf of Mexico refineries and platforms re-start production
New York: Crude oil fell for a second session in New York after producers resumed output in the U.S. Gulf of Mexico and refineries shut by Hurricane Katrina reopened.

While BP said its Holstein platform in the U.S. Gulf had started production, Royal Dutch Shell Plc and Marathon Oil Corp. also said that their two refineries in Louisiana had resumed processing during the weekend.

In the past week, oil companies have restored about 390,000 barrels of daily output shut by the hurricane, according to the latest report from the U.S. Minerals Management Service.

Crude oil for October delivery fell as much as $1.31, or 1.9 percent, to $66.26 a barrel in after-hours trading on the New York Mercantile Exchange. The exchange was closed yesterday for the Labor Day holiday. October crude oil fell 2.7 percent to $67.57 in New York on Sept. 2 after the International Energy Agency agreed to release 60 million barrels of oil and oil products from the reserves of its member nations to help meet U.S. fuel demand.

The U.S. gets about 30 percent of its oil from the Gulf of Mexico, which is also home to half the nation's refining capacity.

About 1.04 million barrels of production, 70 percent of the region's total, remains shut-in, the Minerals Management service said yesterday, down from the 1.43 million barrels, or 95 percent of output, halted immediately after the storm.
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Bras head for shops as EU and China cease fire
Beijing: With the European Union and China striking a deal on textile quotas last night, millions of stranded bras, pullovers and pairs of trousers held up at European ports will now head for shops across Europe by the end of the month.

Half of the clothes backed up in European ports will be allowed in outside the quotas. The other half will be deducted by the Chinese from future years' quotas.

The split down the middle was agreed just in time to be announced at a press conference involving Tony Blair, Jose Manuel Barroso, the president of the European Commission, and Wen Jiabao, the Chinese premier.

They had been conducting the annual EU-China summit, with Blair attending because Britain currently holds the rotating EU presidency.

Europe's retailers are now calling for compensation to cover the losses and disruption caused by the logjam, saying they have been unfairly punished for decisions made in good faith. The retailers said that that the big worry now was long-term consequences as these products were being released at the expense of next year's quota. They expressed concern that this could lead to shortages of Chinese clothing products and higher prices for the consumer.

Sir Digby Jones, the director general of the Confederation of British Industry, who was also in Beijing, said: "By 'borrowing' from next year's quota it is only delaying the problem. The real answer is to allow access to the EU for goods produced in China and for EU producers to adapt to the competitive challenge this presents."

The original deal to limit the rise in Chinese clothes exports to Europe was struck in Shanghai in June by Peter Mandelson, the EU trade commissioner. He was under pressure from countries such as Italy, France and Portugal eager to protect domestic textile industries.

Yesterday, he attempted to apportion blame for the fiasco that followed, when clothes already bought and mostly paid for by European retailers before the deal came into effect in mid-July hit the new limits.

"The member states were pressing me to negotiate an agreement," he said. "I said there were intrinsic difficulties in operating restrictions of this kind. Despite these difficulties member states wanted me to press on and negotiate an agreement."

EU member states will now have to ratify yesterday's re-worked deal. Officials said this process began yesterday afternoon and would continue today.

Mr Mandelson said he hoped and expected that they would do so, though he refused to be drawn on whether he thought Italy and France might object. He said he had discussed the issue with them in Brussels on Friday. "I broadly speaking knew what they wanted," he said.

The quotas, which limited growth in Chinese exports in 10 categories of clothing to between eight and 12.5 per cent a year until 2008, were imposed because of a surge in the trade in the first half of this year.

This in turn followed the end of a worldwide quota system on Jan 1. Textile manufacturers said they needed more time to adjust despite the 10-year notice given of the end of the previous system.

After the build-up in the ports began, the Chinese were reluctant to make further concessions to facilitate the end of what was essentially a row between European retailers and European manufacturers.

Yesterday's deal was met with smiles by Mr Mandelson and the Chinese trade minister, Bo Xilai, who together negotiated the settlement.

But it enabled Mr Bo to turn the tables on western politicians who have for years lectured China on the need to open its economy to international competition. He gave them a long lecture back on the virtues of free trade.

"Conservatives and protectionists" in the EU posed a "great danger to the voice of free trade", he said.
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