Aug. 30 (Bloomberg) -- Oil dropped for a second day in New York as stockpiles unexpectedly rose and Hurricane Isaac weakened, reducing the threat to offshore platforms and rigs in the Gulf of Mexico.
Futures slipped as much as 0.6 percent after falling 0.9 percent yesterday. Crude inventories increased 3.8 million barrels last week, data from the Energy Department showed. They were forecast to decrease 1.75 million barrels, according to a Bloomberg News survey. Isaac was downgraded to a tropical storm after striking the Louisiana coast as a hurricane.
“Isaac caused temporary shut-downs of oil facilities but it doesn’t appear to have done any lasting damage, so that’s been removed as a threat,” Ric Spooner, a chief market analyst at CMC Markets in Sydney, said by telephone today. “The increase in inventory, as opposed to an expected decline, is a little bit of a minor negative.”
Oil for October delivery slid as much as 58 cents to $94.91 a barrel in electronic trading on the New York Mercantile Exchange and was at $95.12 at 8:07 a.m. London time. The contract yesterday dropped 84 cents to $95.49, the lowest close since Aug. 27. Prices are 7.9 percent higher this month, headed for a second monthly gain, and 3.8 percent lower this year.
Brent oil for October settlement rose 11 cents to $112.65 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade’s premium to West Texas Intermediate was at $17.54, from $17.05 yesterday.
Oil’s decline in New York may stall at $94.95 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. Buy orders tend to be clustered near technical-support levels.
Isaac will weaken for the next two days, the National Hurricane Center said in an advisory at 2 a.m. New York time. It was 10 miles (15 kilometers) west-southwest of Baton Rouge with top winds of 50 miles per hour, down from 80 mph at landfall on Aug. 28, and moving northwest at 5 mph.
Companies halted about 95 percent of oil production in the Gulf of Mexico and 72 percent of natural-gas output, the Bureau of Safety and Environmental Enforcement said. Six Louisiana refineries were shut, idling 6.7 percent of U.S. capacity, according to data compiled by Bloomberg.
“WTI fell after an unexpected increase in U.S. crude inventories and on expectations that damage to U.S. Gulf production from Isaac would be minimal,” Mark Pervan, the head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne, said in a note today.
U.S. gasoline supplies dropped 1.51 million barrels last week, the Energy Department report showed. They were forecast to decline 1.45 million barrels, according to the median estimate of 12 analysts in the Bloomberg survey. Distillate stockpiles, a category that includes diesel and heating oil, climbed 873,000 barrels compared with a projected 200,000 barrel increase.
The International Energy Agency may release oil stockpiles from emergency reserves in September to prevent higher prices from derailing the global economic recovery, according to Mirae Asset Securities Ltd. Production losses from Hurricane Isaac are equivalent to the drop in supplies after sanctions were imposed on Iran in July, Gordon Kwan, Mirae’s head of energy research in Hong Kong, said in an e-mailed report today. Brent will trade between $105 and $120 a barrel in the month ahead, he said.
Japan’s crude imports from Iran fell 52 percent in July from a year ago, according to data today from the Ministry of Finance. Purchases were 624,585 kiloliters, or about 127,000 barrels a day, compared with 1.31 million kiloliters in July 2011, the ministry said. Imports fell 23 percent from June.
Japanese shippers lost access to insurance for cargoes from Iran after European Union sanctions on the Middle East nation’s crude shipments took effect on July 1. The West alleges that Iran is concealing a nuclear-weapons program, a charge the Persian Gulf nation rejects.
Gasoline was little changed near the lowest level this week after Venezuela said it’s almost ready to resume operations at its Amuay oil refinery, the nation’s biggest, after a four-day fire. Petroleos de Venezuela SA will end the process of cooling the area affected by the blaze today, Oil Minister Rafael Ramirez said on state television yesterday. The plant can process as much as 645,000 barrels of crude a day.
Gasoline for September delivery was at $3.105 a gallon, up 0.47 cents, on the New York Mercantile Exchange. The contract reached $3.205 on Aug. 27, the highest intraday level in four months, amid concern the fire and Isaac would curb supplies.
The September future expires tomorrow. The more-active October contract was at $2.923 a gallon.
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