Oil traded near the lowest level in two weeks on speculation Tropical Storm Isaac’s impact on output in the Gulf of Mexico will be limited. Gasoline was near a four- month high amid a fire at Venezuela’s biggest refinery.
West Texas Intermediate futures were little changed in New York after dropping a third day yesterday, the longest losing streak since June. Isaac was near hurricane strength as it headed for the Gulf coast, according to the National Hurricane Center. Storage tanks burned for a fourth day at Venezuela’s 645,000 barrels-a-day Amuay plant, where an Aug. 25 gas explosion killed 48 people. Oil has pared gains before a U.S. Federal Reserve symposium in Jackson Hole, Wyoming, on Aug. 31.
“It seems likely now that Isaac won’t be doing any lasting damage to oil facilities in the Gulf,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “Buyers seem reluctant to take prices too much higher from here until they get further detail” on what the Fed might do to boost economic growth, he said.
Oil for October delivery was at $95.35 a barrel, down 12 cents, in electronic trading on the New York Mercantile Exchange at 4:46 p.m. Sydney time. The contract yesterday fell 68 cents, or 0.7 percent, to $95.47, the lowest close since Aug. 15. Prices are 3.5 percent lower this year.
Brent oil for October settlement was at $112.27 a barrel, up 1 cent, on the London-based ICE Futures Europe exchange. The European benchmark grade’s premium to WTI was at $16.92, from $16.79 yesterday.
Isaac’s center was about 145 miles (235 kilometers) southeast of the mouth of the Mississippi River with top winds of 70 miles per hour, the National Hurricane Center said in an advisory at 2 a.m. in Miami. That’s 4 mph less than hurricane intensity. It was moving northwest at 12 mph and is forecast to strengthen before approaching southeastern Louisiana and Mississippi today, the center said.
The storm halted about 78 percent of oil output and 48 percent of natural-gas production in the Gulf and forced evacuations from 346 production platforms and 41 rigs, the Bureau of Safety and Environmental Enforcement said yesterday. Four refineries in Louisiana were shut, idling combined capacity of 832,700 barrels a day, or 4.8 percent of the U.S. total, and at least four are running at reduced rates.
The region accounts for 23 percent of U.S. oil output and 7 percent of natural gas production, according to the U.S. Energy Department in Washington.
Valero Energy Corp. (VLO) is shutting the St. Charles and Meraux refineries in Louisiana, Bill Day, a company spokesman in San Antonio, said by e-mail. Phillips 66 is temporarily shutting down its 247,000 barrel-a-day Alliance refinery at Belle Chasse, Louisiana, the company said in a statement on its website. Exxon Mobil Corp. began closing operations at the Chalmette plant near New Orleans, the company said on a community hotline.
Marathon Petroleum Corp.’s Garyville refinery in Louisiana is operating at reduced rates, Shane Pochard, communications manager for the company, said in an e-mail. Motiva Enterprises LLC’s Norco and Covent refineries in Louisiana are also running at lower rates, the company said on its website, as is Exxon Mobil’s Baton Rouge plant.
In Venezuela, firefighters have put out one of the three blazes at the Amuay refinery and extinguished about 75 percent of another, President Hugo Chavez said on his Twitter account today. There is no structural damage to the processing units at the facility about 240 miles west of Caracas, according to Oil Minister Rafael Ramirez.
Venezuela has 4 million barrels of inventories of gasoline and other petroleum products and continues to produce 735,000 barrels of gasoline a day at plants, including nearby Cardon, according to Ramirez. Amuay will be restarted within two days after all the fires have been extinguished, he said.
Gasoline for September delivery advanced as much as 0.2 percent to $3.1621 a gallon on the New York Mercantile Exchange today after climbing 2.5 percent to $3.1548 yesterday, the highest settlement since April 30. The premium of the motor fuel to WTI gained as much as 1 percent to $28.71 a barrel, the widest gap in a week, after increasing 9 percent yesterday.
U.S. crude stockpiles probably shrank 2 million barrels last week, according to a Bloomberg News survey before an Energy Department report tomorrow. That would be the fifth weekly drop, the longest run of declines since July 2011. The decrease would leave inventories at the lowest level since March 23.
Gasoline supplies may have fallen 1.4 million barrels, according to the median estimate of 11 analysts in the Bloomberg survey. Distillate stockpiles, a category that includes diesel and heating oil, probably rose 400,000 barrels.
The American Petroleum Institute will release separate inventory data today. The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Oil in New York has technical support around $94.05 a barrel along the bottom of a short-term uptrend channel on the daily chart, according to data compiled by Bloomberg. This channel started from the June 28 drop to $77.28, the 2012 intraday low. Crude’s moving average convergence-divergence indicator yesterday fell below its signal line, indicating a loss of momentum. Investors tend to sell contracts on a so- called MACD crossover.
Federal Reserve Chairman Ben S. Bernanke will speak at the Kansas City Fed’s annual symposium in Jackson Hole, where he may shed light on the likelihood of a third round of asset purchases. The central bank bought $2.3 trillion of debt since 2008 in two previous rounds of quantitative easing.
To contact the reporter on this story: Ben Sharples in Melbourne at email@example.com