U.S. Gulf oilpatch cleaning up after Dolly

By Erwin Seba

HOUSTON (Reuters) - U.S. Gulf of Mexico energy producers mopped up from Tropical Storm Dolly on Thursday after the diminished hurricane barely put a dent in crude oil, natural gas and fuel output.

Offshore producers heaved sighs of relief that the storm, far inland by Thursday afternoon, packed none of the fury of hurricanes in 2005, which temporarily shut all Gulf of Mexico oil and gas production, pushing oil prices to then-record highs.

The U.S. Minerals Management Service said 1.4 percent of Gulf oil production remained shut on Thursday, down from 4.5 percent Wednesday. Shut offshore natural gas output stood at 5.5 percent, down from 7.8 percent.

Onshore, leading U.S. refiner Valero Energy Corp said it expected to ramp its Houston and Port Arthur, Texas, refineries to full production by the end of the week after their output was cut back Wednesday by a shipping interruption at Houston.

U.S. light crude settled up $1.05 at $125.49 a barrel after hitting a 7-week low of $123.50 earlier in the day.

As high winds eased throughout the day Thursday, evacuated workers were being flown back to production platforms and drilling rigs offshore.

Chevron, Anadarko Petroleum Corp and Apache Corp said they had or would be resuming full production.

Along the Houston Ship Channel, ship pilots were steering vessels to the busiest U.S. petrochemical port for the first time in 36 hours.

A total of 25 ships were waiting to come into the Houston channel and 37 were waiting to depart, according to the U.S. Coast Guard.

The first two scheduled to sail up the channel were two deep-draft oil tankers, said the Houston ship pilots association said.

Rough seas halted ship traffic in Corpus Christi, Texas, another busy petrochemical port. But none of the three Corpus Christi refineries have reported problems.

The U.S. Gulf of Mexico produces 1.3 million barrels per day of crude, or a quarter of domestic oil output, and 7.7 billion cubic feet per day of natural gas, or 13 percent of domestic gas output.

(Additional reporting by Bruce Nichols in Houston, Richard Valdmanis and Janet McGurty in New York and Catherine Bremer in Mexico City; Editing by Christian Wiessner)