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Oil Rises on U.S. Supply Forecast, Venezuela Blaze
U.S. crude stockpiles probably fell by 2 million barrels last week, or 0.6 percent, according to a Bloomberg News survey before an Energy Department report tomorrow. Tropical Storm Isaac was near hurricane strength as it headed for the Gulf coast, according to the National Hurricane Center. Processing units at Venezuela’s 645,000 barrel-a-day Amuay plant remain halted after a gas explosion on Aug. 25 that killed 48 people. Oil also increased before a U.S. Federal Reserve symposium in Jackson Hole, Wyoming, on Aug. 31.
“Crude trade will remain jittery this week as storm- related disruptions and refinery and storage tank fires in Venezuela keep investors on edge,” said Andrey Kryuchenkov, an analyst at VTB Capital in London. “On top of that we have expectations of action from central bankers.”
Oil for October delivery advanced as much as $1.07, or 1.1 percent, to $96.54 a barrel and was at $96.25 in electronic trading on the New York Mercantile Exchange at 1:29 p.m. London time. The contract fell 68 cents, or 0.7 percent, to $95.47 yesterday, the lowest close since Aug. 15. Prices are 2.3 percent lower this year.
Brent oil for October settlement was at $112.60 a barrel, up 33 cents, on the London-based ICE Futures Europe exchange. The European benchmark grade’s premium to WTI was at $16.38, from $16.79 yesterday.
U.S. crude inventories may fall for a fifth week, the longest run of declines since July 2011, according to the median of 11 analyst estimates before the Energy Department’s report. The decrease would leave inventories at the lowest level since March 23.
Gasoline supplies may have fallen 1.4 million barrels, and distillate stockpiles, a category that includes diesel and heating oil, probably rose 400,000 barrels, the survey showed.
The industry-funded American Petroleum Institute will publish its supply report later today.
Tropical Storm Isaac’s winds held steady at 70 miles (113 kilometers) an hour, 4 mph below hurricane level, as it moved northwest toward landfall late today or early tomorrow in southern Louisiana, the U.S. National Hurricane Center said at 8 a.m. East Coast time.
About 78 percent of oil production and 48 percent of natural gas output from the Gulf of Mexico has been shut in as Isaac approaches, a Bureau of Safety and Environmental Enforcement report showed yesterday.
Petroleos de Venezuela SA said that all of the fires at storage tanks at its Amuay refinery in Falcon state have now been extinguished, according to a message on its Twitter Inc. account. There is no structural damage to the processing units at the facility about 240 miles west of Caracas, which will be restarted within two days of the flames being extinguished, 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.
Federal Reserve Chairman Ben S. Bernanke will speak at the Kansas City Fed’s annual symposium in Jackson Hole on Aug. 31, 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.
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