Oil Trades Near Four-Month Low as Sandy Shuts Refineries
Oil rose from a four-month low in New York as better-than-expected company earnings bolstered confidence that economic recovery will support fuel demand.
West Texas Intermediate crude climbed as much as 0.8 percent as European equities advanced after results from BP Plc (BP/) and Deutsche Bank AG beat analyst estimates. Prices fell earlier after Phillips 66, Hess Corp. (HES), NuStar Energy LP (NS) and PBF Energy Inc. reduced refinery operations on the U.S. East Coast because of Atlantic storm Sandy. Gasoline dropped from a two-week high.
“We do not see much downside risk for oil demand,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London. The impact of Sandy is “mildly bearish” for crude prices, he said.
WTI for December delivery increased as much as 70 cents to $86.24 a barrel in electronic trading on the New York Mercantile Exchange, and traded for $85.95 at 10:14 a.m. local time. The contract closed at $85.54 yesterday, the lowest since July 10. Floor trading will be suspended for a second day on the Nymex because of the storm, CME Group Inc., the exchange’s owner, said in an e-mail.
Brent for December settlement on the London-based ICE Futures Europe exchange slipped 20 cents to $109.24 a barrel. The European benchmark crude was at a premium of $23.36 to the WTI contract. The spread widened for a sixth day yesterday to $23.90, near the most in more than a year.
Gasoline for November delivery in New York was down 5.29 cents at $2.7039 a gallon. Prices rose 2.1 percent to close at $2.7568 yesterday, the highest since Oct. 17.
BP, Europe’s second-biggest oil company, raised its dividend after earnings topped forecasts, and Deutsche Bank, Germany’s largest lender, said profit unexpectedly rose as investment-banking revenue exceeded targets.
Floor trading on the Nymex was suspended yesterday because of Sandy and will be halted again today, CME Group Inc., the owner of the exchange, said in an e-mailed statement. Electronic trading is operating normally.
Six refineries curbed production because of Sandy, accounting for 1.22 million barrels of the area’s crude- processing capacity of 1.29 million barrels a day, according to data compiled by Bloomberg. The storm may cut East Coast gasoline supplies to the lowest since at least 1990, based on Energy Department data.
Sandy, now termed a post-tropical cyclone packing maximum sustained winds of 65 miles (105 kilometers) per hour, down from 75 mph earlier, was centered 15 miles east of York, Pennsylvania, according to an advisory released at 5 a.m. by the Maryland-based Hydrometeorological Prediction Center.
New York, New Jersey, Baltimore, Long Island, Delaware Bay and Connecticut ports were closed to vessel traffic by the U.S. Coast Guard, halting tanker deliveries that help supply the region’s refineries with crude.
Colonial Pipeline Co., which operates the largest system connecting the U.S. Gulf Coast and the eastern seaboard, began shutting delivery lines along the East Coast as terminals in Virginia, Maryland, New Jersey and New York stopped operations. The company planned to close Line 3, an 825,000 barrel-a-day link running to Linden from Greensboro, North Carolina, at 7 p.m. New York time yesterday, a bulletin to shippers showed.
The U.S. Energy Information Administration said it will postpone the release of its weekly report on oil stockpiles and production from tomorrow because of storm-related delays. The data may be published Nov. 1, the Energy Department’s statistical unit in Washington said in an e-mailed statement.
The American Petroleum Institute will release its weekly report on supply and demand at the usual time of 4:30 p.m. in Washington today, and will alert subscribers if it decides to delay the data, spokesman Carlton Carroll said in an e-mail.
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