MW: Oil slips as Isaac lands; API spurs supply fear
By Claudia Assis and Michael Kitchen, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures traded lower Wednesday as Hurricane Isaac came ashore, and as traders worried about a possible inventories increase.
Crude for October delivery CLV2 -0.34% lost 12 cents, or 0.1%, to trade at $96.25 a barrel on the New York Mercantile Exchange, paring the contract’s 0.9% gain in the previous session.
Worries about Hurricane Isaac’s impact on the Gulf of Mexico’s energy production were a large part of Tuesday’s gains. With the Category-1 hurricane coming ashore late Tuesday in southern Louisiana, the concerns eased.
Traders expect “oil production in the Gulf of Mexico will quickly return to normal,” analysts at Commerzbank said in a note to clients.
They were also disappointed with a trade group’s inventories report, which showed an increase in supplies for last week on the back of higher imports and lower refinery utilization, the analysts added.
Late Tuesday, the American Petroleum Institute’s weekly inventory report showed crude stockpiles rising 5.5 million barrels in the week ended Aug. 24. Read more on API crude-oil inventory report.
The API report comes ahead of official word on inventories estimates by Energy Information Administration, more closely watched, due later Wednesday.
A Platts survey of analysts expect a 2 million barrel drop.
Also, nations that form the Group of Seven leading industrialized economies late Tuesday asked producers to hike output, citing the risks to the global economy from higher oil prices.
September gasoline futures RBU2 +0.09% turned higher, recently gaining less than a penny, or 0.1%, to $3.13 a gallon. The API report showed a 2.4-million-barrel drop in gasoline inventories.
September heating oil HOU2 +0.05% also turned, up less than 1 cent to $3.12 a gallon, while September natural-gas futures NGU2 -0.42% gave 1 cent, or 0.3%, to $2.61 per million British thermal units.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles.
