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 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 and Apache 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.