WSJ:OIL FUTURES: Crude Rises in Asia; Focus on Macro Data After Storm
By Eric Yep
Crude-oil futures rose in Asian trade Wednesday, even as markets are yet to fully assess the damage to U.S. East Coast oil refineries and infrastructure due to superstorm Sandy.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $85.95 a barrel at 0623 GMT, up $0.27 in the Globex electronic session. December Brent crude on London's ICE Futures exchange rose $0.08 to $109.16 a barrel.
"Early refinery status reports are beginning to emerge, and so far, there are no indications of flooding or other serious damage that could lead to an extended shutdown," JP Morgan said in a note.
Philadelphia Energy Solutions said it began resuming normal operations at its Philadelphia refinery. But two refineries--Phillips 66's (PSX) Linden, N.J., refinery and Hess Corp.'s (HES) facility in Port Reading, N.J.--remained shut down due to power outages.
"Roughly three-fourths of the region's output capacity were seeing reduced rates. All in all, less than 2% of total U.S. refinery capacity is off line," energy consulting firm Ritterbusch and Associates said in a note.
Analysts largely expect the fall in oil product supply to be offset by weak demand for fuels in the immediate aftermath of the storm.
BP PLC (BP, BP.LN) said a fire that broke out at its Texas City, Texas, refinery was extinguished Tuesday afternoon after burning for little over an hour and a half. The hydrotreater on fire was shut, but other units were operating, a spokesman said.
Ports and petroleum terminals from Delaware Bay up to Rhode Island were closed, the Schork Group said in its note.
It said Colonial Pipeline's mainline products artery into the Mid-Atlantic was shut down, Kinder Morgan's jet fuel line into Reagan National Airport was down due to a power outage and Buckeye reported sporadic outages for product lines into New York City.
"Despite the clear and present threat to East Coast gasoline making capacity, Nymex RBOB futures continue to trade poorly," Schork said, adding that product curves didn't indicate a pending supply squeeze.
The U.S. Energy Information Administration will delay the release of its weekly oil inventory report until at least Thursday. A Dow Jones Newswires survey showed oil inventories rose by 2.3 million barrels last week.
The American Petroleum Institute, an industry group, said stocks rose by 2.1 million barrels last week.
After the storm, markets will look to macroeconomic data for cues. Chinese manufacturing data for October is due Thursday and U.S. employment data is scheduled for Friday, while next week, the focus will be on the U.S. presidential election and a leadership change in China.
Nymex reformulated gasoline blendstock for November--the benchmark gasoline contract--rose 692 points to $2.7980 a gallon, while November heating oil traded at $3.0900, 34 points higher.
ICE gasoil for November changed hands at $960.25 a metric ton, down $3.25 from Tuesday's settlement.
