The release of oil from international reserves has helped pull energy prices back almost to the levels seen before the advent of Hurricane Katrina.
Katrina has sent US fuel prices soaring
Brent crude closed down $1.22 at $64.84 a barrel in London on Monday. Prices fell 2.7% in New York on Friday before markets shut for the Labor Day holiday.
Some two million additional barrels a day are to be released into the market in order to ease supply constraints.
Crude oil had surged to a record $70.85 in the US after Katrina wreaked havoc.
Aside from the devastating effect of Katrina on the thousands of people trapped in New Orleans and its flattening of much of the Gulf Coast, key parts of the US oil industry were in the path of the hurricane.
Katrina knocked out US refineries, hammered oil platforms and also sent petrol prices soaring.
At least one of the refineries shut down by the devastating storm - Motiva Enterprises' plant in Convent, Louisiana, which has a maximum daily output of 235,000 barrels - has completed repairs and has begun to re-start operations.
Marathon Petroleum said it expected production at its refinery in Garyville, Louisiana, would be back to normal by Tuesday.
But other plants have suffered severe damage and could be out of action for months.
Worst-hit were Chevron's refinery in Pascagoula, Mississippi, and Conco Phillips' plant in Belle Chasse, Louisiana, which normally produce nearly 600,000 barrels a day between them.
Both suffered "major damage" from floodwaters and could take months to reactivate, a US Energy Department report said.
At least 20 rigs or platforms are reported damaged, sunk or missing, although BP said on Monday it had re-started operations at some offshore facilities including its Holstein platform, which produces 55,000 barrels a day.
"Be wary of good news," said brokerage Fimat in a research note. "The situation remains horrific, and light will be at the end of a very long tunnel."
Help on the way
However, steps have been taken to ease worries about crude supplies and there also have been pledges of gasoline.
The 30-day plan to release oil is the first time the International Energy Agency - whose membership comprises 26 industrialised countries - has taken steps to open up its strategic reserve since 1991.
The 1.5 billion barrel reserve, held by the members, was conceived in the 1970s after the "oil shocks", when embargoes by Middle Eastern producers led to widespread economic damage.
The 11-nation oil producers' group Opec said it was pumping a million barrels a day beyond quotas to help keep supplies running.
One member, Venezuela - whose president, Hugo Chavez, is embroiled in a long-running war of words with Washington DC - offered a million barrels of gasoline.
While the recovery from Katrina is likely to take time, analysts were optimistic that the market may already have seen the worst.
"Literally and figuratively, I think we've weathered the storm," said David Thurtell, commodity strategist at the Commonwealth Bank of Australia.