BLBG:Oil Trims Biggest Monthly Decline Since May After Storm Sandy
Oil trimmed the biggest monthly decline since May and gasoline rose as refineries started resuming operations after the Atlantic superstorm Sandy moved away from the U.S. East Coast.
Crude futures gained as much as 0.4 percent after advancing 0.2 percent yesterday. Philadelphia Energy Solutions’ 355,000 barrel-a-day Pennsylvania refinery is restoring operations and NuStar Energy LP (NS)’s 74,000 barrel-a-day Paulsboro, New Jersey, plant will be at full production tomorrow, the companies said. Seven refineries with a total capacity of 1.29 million barrels a day had shut or reduced operations because of Sandy.
“The hurricane is gone and we now have to investigate how much of an impact it had on the refineries,” said Tetsu Emori, a chief fund manager at Astmax Investment Management Inc. in Tokyo. “People in the market are unwilling to take fresh positions at the moment, but they are also not willing to sell because oil is currently quite cheap and oversold.”
Crude for December delivery rose as much as 34 cents to $86.02 a barrel in electronic trading on the New York Mercantile Exchange at 2:22 p.m. Singapore time. Prices gained 14 cents yesterday to $85.68, the highest close since Oct. 26. Futures are down 6.7 percent in October and 13 percent this year.
Brent oil for December settlement rose 7 cents to $109.15 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude’s premium to the West Texas Intermediate contract was at $23.18, down from $23.40 yesterday.
Price Support
Oil may extend gains in New York after futures settled above the lower Bollinger Band yesterday for the third time in four days, signaling technical support, according to data compiled by Bloomberg. This indicator is at $85.02 a barrel today. Buy orders tend to be clustered near chart-support levels.
Gasoline for November delivery rose 6.92 cents to $2.798 a gallon in New York, the highest level since Oct. 16. The contract expires today. The more-active December future was up 2.81 cents at $2.6436.
Floor trading on the Nymex will resume today after being suspended for a second day yesterday because of the storm, CME Group Inc., the exchange’s owner, said in an e-mail. Electronic trading, where the bulk of futures volume occurs, has operated normally.
East Coast Refineries
Philadelphia Energy’s Pennsylvania refinery “came through the storm without issues,” Cherice Corley, a spokeswoman at the plant, said in an e-mail yesterday. NuStar announced the Paulsboro resumption on its website.
About 308,000 barrels a day of refining capacity remained shut in New Jersey. Production starts at Phillips 66’s 238,000 barrel-a-day Bayway refinery in Linden and Hess Corp. (HES)’s 70,000 barrel-a-day Port Reading plant are contingent on post-storm assessments, the companies said.
PBF Energy Inc. (PBF)’s Delaware City and Paulsboro facilities “ran well” overnight at reduced rates, said Michael Karlovich, a Parsippany, New Jersey-based spokesman for the company. The plants have a combined capacity of 367,200 barrels a day.
Trebor Banstetter, an Atlanta-based spokesman for Delta Air Lines Inc.’s Monroe Energy LLC, didn’t immediately respond to an e-mail asking the status of the 185,000 barrel-a-day Trainer, Pennsylvania, refinery. The U.S. Energy Department said the plant was operating at reduced rates as of 8 a.m. local time yesterday.
Buckeye Partners LP (BPL) is starting to return six oil-products pipelines to service after shutting them before Sandy, according to a statement from the company yesterday. The resumptions are conditional on receiving favorable reports on the lines and supply availability, the company said.
Oil Stockpiles
Sandy continued to weaken as it passed over Pennsylvania, according to an advisory on the National Hurricane Center’s website at 11 p.m. New York time yesterday. The post-tropical cyclone had maximum sustained wind speeds of 40 miles (64 kilometers) per hour and was about 50 miles east-northeast of Pittsburgh, Pennsylvania, traveling northwest at 8 mph.
U.S. oil stockpiles rose 2.1 million barrels to 371.7 million last week, the American Petroleum Institute said yesterday. Crude supplies at Cushing, Oklahoma, the delivery point for Nymex futures, dropped 659,000 barrels to 43.4 million.
The Energy Department postponed the release of its inventory report from today. It may publish the data tomorrow, depending on the extent of storm damage and delays, the department’s Energy Information Administration said in an e- mail.
The government report may show crude supplies increased by 1.75 million barrels last week, according to the median of nine responses in a Bloomberg survey of analysts. Gasoline stockpiles fell 500,000 barrels and distillate inventories declined by 1.4 million in the survey.
The industry-funded API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
To contact the reporter on this story: Ramsey Al-Rikabi in Singapore at ralrikabi@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
