HT:Brent slips below $111 as Irene spares oil refineries
Brent crude fell below $111 on Monday as oil refiners and terminals along the US east coast weathered the worst of a tropical storm, easing fears of fuel supply disruptions in the world's top oil consumer.
Brent crude was down 71 cents at $110.65 per barrel as of 0227 GMT, posting its
steepest since Aug. 18. US crude slipped 8 cents to $85.29, swinging between a high of $85.72 and $85.11.
Most oil refineries, terminals and pipelines along the east coast weathered Tropical Storm Irene, downgraded from hurricane levels. Seven refineries with a total of 1.23 million barrels per day capacity – 73% of the 1.7 million bpd total in the US Northeast - were in the storm's projected path.
“Expectations of refiners being affected added a risk premium, but now that the impact is not as bad as expected, we are seeing a little pull back in prices,” said Ben Le Brun, market analyst with CMC Markets in Sydney.
The US Northeast is the second-smallest of the five US refining regions, with most of its fuel being supplied by pipeline from the Gulf Coast or tanker ship from Europe.
Nuclear plants along the east coast were also unaffected, with most expected to restart or boost output once the storm passes. The storm has left at least 15 dead, as many as 3.6 million customers without electricity and thousands of downed trees.
Losses in oil were capped by comments from US Federal Reserve Chairman Ben Bernanke that suggested leaving the door open for further action to stimulate the world's biggest economy. His remarks and the downgrade of Irene helped Asian stocks open firmer on Monday.
The US central bank's policy panel would meet for two days next month instead of one to discuss additional monetary stimulus, Bernanke said on Friday, offering some hope to investors. But the chairman stopped short of announcing any new stimulus measures.
On Friday, Brent settled up 75 cents at $111.36, gaining 2.52% for the week. US oil closed at $85.37, posting a 3.78% gain for the week, after four consecutive weekly losses.
Market participants will be watching a slew of economic data out of the US this week for further insight into the health of the world's biggest economy. The key will be the non-farms payrolls report for August due out on Friday.
