Oct. 20 (Bloomberg) -- Crude oil fell and gasoline plunged to the lowest since June as Hurricane Wilma became less of a threat to oil fields in the Gulf of Mexico.

The storm should reach southern Florida during the weekend, the National Hurricane Center said. Prices surged to records after Hurricanes Katrina and Rita shut U.S. offshore platforms in the region that's responsible for 30 percent of the nation's oil production. U.S. oil and gasoline stockpiles rose last week, according to an Energy Department report yesterday.

``Wilma weakened a little bit and the path has it heading in a direction that won't impact oil production,'' said Kyle Cooper, an analyst with Citigroup Inc. in Houston. ``Also, yesterday's report showed that demand was down for one more week and inventories were up.''

Crude oil for November delivery fell $1.38, or 2.2 percent, to $61.03 a barrel on the New York Mercantile Exchange, the lowest close since Aug. 3. Futures dipped below $60 for the first time since July 29 during the session. Oil reached a record $70.85 a barrel on Aug. 30, the day after Katrina made landfall. Prices are up 11 percent from a year ago.

The November crude-oil futures contract expires today. The more-active December contract fell $1.49, or 2.4 percent, to $60.02 a barrel.

Gasoline for November delivery plunged 6.32 cents, or 3.8 percent, to $1.6131 a gallon in New York, the lowest close since June 30. Prices have dropped 14 of the last 16 sessions and are down 45 percent from a record $2.92 reached on Aug. 31. Gasoline is up 15 percent from a year ago.

`Significant Damage'

``Oil at $60 and $70 was predicated on extremely strong economic growth and these hurricanes have had a deleterious effect on the economy.'' said John Kilduff, vice president of risk management at Fimat USA in New York. ``It now looks like the next hurricane will miss the Gulf refining region. The storm may do significant damage to Florida though, which would further hit the economy.''

Wilma's winds eased to 145 mph as the storm headed for Florida, where the 80,000 residents of the Keys were ordered to evacuate today. Wilma, which set an intensity record, may strengthen, forecasters said. The storm's sustained winds decreased from 150 mph (241 kph), the hurricane center said in an advisory at 2 p.m. Miami time.

Prices rose on Oct. 17 on concern that the storm would move toward oil production areas off Louisiana and Texas. Almost 19 percent of U.S. refining capacity was idled because of damage and blackouts caused by Katrina and Rita.

Natural Gas Supplies

The fall in prices accelerated after the department released a report showing that U.S. natural-gas inventories rose a greater-than-expected 75 billion cubic feet last week. Analysts forecast an increase of 56 billion cubic feet, according to the median of 21 estimates in a Bloomberg survey.

Natural-gas futures tumbled after the report. Gas and oil prices often move in tandem because as many as 10 percent of U.S. factories and power plants can switch between burning oil and gas, depending on cost.

``Two days before Katrina ripped through the Gulf of Mexico forecasters were saying it would make landfall at Tallahassee, Florida,'' said Adam Sieminski, chief energy economist at Deutsche Bank AG in New York. ``It ended up making landfall south of New Orleans and we know the results. Hurricane forecasting is still an art not a science.''

Heating oil for November delivery fell 4.35 cents, or 2.3 percent, to $1.8699 a gallon in New York, the lowest close since Sept. 16. Prices are 20 percent higher than a year ago.

Retail heating oil in the U.S. averaged $2.649 a gallon in the week ended Oct. 17, up 33 percent from a year ago, the Energy Department said yesterday.

`Shoulder Season'

``We're still in shoulder season,'' Sieminski said. ``Gasoline season is over and heating demand has yet to pick up.''

Regular gasoline averaged nationwide fell 1.4 cents to $2.709 a gallon yesterday. Prices are down 11 percent from the record $3.057 a gallon on Sept. 2, according to the AAA, the nation's largest motoring organization. Pump prices are 34 percent higher than a year ago.

U.S. gasoline demand normally declines after the Labor Day holiday in early September. Global fuel use peaks during the Northern Hemisphere winter. Heating oil consumption jumps as temperatures plunge and furnaces are stoked in Europe, North America and eastern Asia.

Total petroleum supplied, a measure of demand, averaged 20 million barrels a day during the past four weeks, 3.2 percent less than a year earlier, the department said.

`Mesmerized'

``The market's mesmerized by what appear to be low demand numbers,'' Sieminski said. ``Product supplied is not the same as demand, since it measures what is leaving refineries, not what's being consumed. During the next three weeks we will find out if there really was any demand destruction.''

The index of leading economic indicators in the U.S. fell for a third month in September, as Katrina caused fuel costs and jobless claims to jump, depressing consumer confidence. The Conference Board's gauge, which measures the likely performance of the U.S. economy in the next three to six months, fell a greater-than-expected 0.7 percent.

The three consecutive declines in the leading indicators were the first since 2001.

In London, the December Brent crude-oil futures contract fell 69 cents, or 1.2 percent, to $57.91 a barrel on the International Petroleum Exchange, the lowest close since July 25. Prices reached $68.89 on Aug. 30, the highest since trading began in 1988.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.

Last Updated: October 20, 2005 15:31 EDT