New York's main contract, light sweet crude for delivery in November, was down 1.13 dollars at 63.06 dollars per barrel at 2208 GMT on the New York Mercantile Exchange after shedding more than 1.20 dollars earlier in the day.

However, oil production off the southern coast of the United States remained suspended on Sunday pending an assessment of the effect of Hurricane Rita on industry facilities in the region, a US government agency said.

The Texas refinery town of Port Arthur appeared to be hard hit, with water waist-deep in some places. But gulf oil platforms and refineries dotting the coasts of Texas and neighboring Louisiana appeared to have survived Hurricane Rita without major damage.

A spokesman said the Energy Department remained cautious as it was "still canvassing the situation," but Texas Governor Rick Perry told Fox News Sunday, "The refineries appear to be in relatively good shape."

A gas pipeline ruptured, "but it's being repaired as we speak," Perry said. "So we may have been blessed in the sense of missing a major hit on our oil refinery (operations)."

While oil companies said it would take some time to assess the damage, Perry expressed cautious optimism about the oil platforms.

"The reports from the gulf yet are still spotty coming in, but it appears that those platforms made it through this in relatively good shape also," he said.

Perry was seconded by other officials.

While inspections were ongoing, the storm appeared to have caused "minimal damage" to refineries farther inland, David Paulison, acting director of the Federal Emergency Management Agency, said at a Washington briefing.

The US Coast Guard reported "preliminary minimal damage" to the facilities.

Texas Senator Kay Bailey Hutchison said most refineries appeared undamaged and would resume operations soon.

"The biggest part of that (refineries) was not hit, and they will probably be able to get up and running within a week, which means that gasoline prices should not spike all over America," she told ABC television.

Refineries in Port Arthur, to the east of Houston, did suffer some damage from the storm and "it will take longer to get them up and running," Hutchison said.

Some 81 percent of 819 platforms and 69 percent of 134 rigs operating in the Gulf of Mexico were evacuated before the storm, which struck the US states of Texas and Louisiana on Saturday, the US Minerals Management Service (MMS) reported on its website.

The shutdown represents a loss of 1.5 million barrels of crude a day.

Some 80.5 percent of natural gas production in the area was also halted, according to the MMS.

The network of refineries off the coast of Texas represent some 25 percent of US refining capacity and oil and gas prices had soared four weeks earlier when another storm, Hurricane Katrina, hit nearby on August 29.

Following Katrina, retail gasoline passed three dollars a gallon and oil above 70 dollars a barrel.

After a large-scale evacuation, residents of Texas and Louisiana returned home on Sunday to find debris-strewn, flooded streets and extensive power outages. Only a single death has been reported, however, in a tornado in Mississippi spawned by Hurricane Rita.

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