BLBG:Oil Trades Near Three-Day High as Refineries Resume After Sandy
Oil traded near the highest level in three days in New York as refineries resumed operations after Atlantic superstorm Sandy, increasing demand for crude.
West Texas Intermediate futures were little changed after rising 0.7 percent yesterday. U.S. East Coast refineries accounting for 76 percent of the 1.29 million barrels a day of capacity in Sandy’s path have restored operations or are in the process of doing so. Price gains stalled before an Energy Department report today that may show U.S. crude stockpiles rose to the highest level in three months ahead of the storm.
“Refineries are getting back online quickly so clearly that is going to remove some of that concern about a temporary oversupply,” said Michael McCarthy, a chief market strategist at CMC Markets in Sydney. “I’m expecting further pressure on prices in the next week or so from inventory builds.”
Crude for December delivery was at $86.41 a barrel in electronic trading on the New York Mercantile Exchange, up 17 cents, at 2:46 p.m. Singapore time. Prices gained 56 cents yesterday to $86.24, the highest close since Oct. 26. Futures are down 13 percent this year.
Brent oil for December settlement on the London-based ICE Futures Europe exchange was at $108.72 a barrel, up 2 cents. The contract earlier dropped as much as 0.5 percent and has fallen the past three days. The European benchmark crude was at a $22.31 premium to WTI, from $22.46 yesterday.
Refinery Operations
PBF Energy Inc.’s Delaware City, Delaware, and Paulsboro, New Jersey, refineries were operating normally yesterday, according to recorded community hotline messages. The plants, with a combined capacity of 367,200 barrels a day, ran at reduced rates throughout the storm.
NuStar Energy LP (NS)’s 74,000 barrel-a-day Paulsboro asphalt facility in New Jersey was returning to service and is expected to be back to full production by today, according to a statement posted on the company’s website Oct. 30.
Delta Air Lines Inc.’s Monroe Energy LLC 185,000 barrel-a- day Trainer, Pennsylvania, refinery was operating normally, the Energy Department said yesterday. Trebor Banstetter, an Atlanta- based spokesman for Monroe, didn’t respond to an e-mail about the status of the plant.
Restarts at Phillips 66’s 238,000 barrel-a-day Bayway plant in Linden and Hess Corp. (HES)’s 70,000 barrel-a-day Port Reading facility are contingent on post-storm assessments, the companies said Oct. 30. Phillips reported flooding in low-lying areas at Linden and said yesterday the refinery regained power.
Philadelphia Energy Solutions’ 355,000 barrel-a-day Pennsylvania refinery will operate at reduced rates until waterborne deliveries resume, Cherice Corley, a spokeswoman for the plant, said in an e-mail yesterday.
Oil Inventories
Gasoline for December delivery in New York gained 0.57 cents to $2.636 a gallon. It rose 1.48 cents to $2.6303 yesterday while the November contract, which expired, advanced 3.3 cents to $2.7618.
U.S. crude inventories probably increased by 1.8 million barrels to 376.9 million in the week ended Oct. 26, before Sandy struck, according to the median estimate of 11 analysts ahead of the Energy Department report. That would be the highest level since July 20. The weekly data on supplies and output will be published at 11 a.m. Washington time, the department said in an e-mailed statement. It postponed the report by a day because of disruptions caused by Sandy.
Output probably kept climbing after reaching 6.61 million barrels a day in the week to Oct. 19, the most since May 1995, the survey shows. Imports grew 5.7 percent for a fourth weekly increase. Shipments may end their upward trend this week after Sandy shut terminals and closed refineries.
OPEC Production
Gasoline stockpiles are expected to have gained 850,000 barrels to 199.4 million, according to the survey. Distillate- fuel inventories, a category that includes diesel and heating oil, probably fell 1.4 million barrels to 116.6 million.
Oil production by OPEC, the supplier of about 40 percent of the world’s crude, declined in October as Iranian output dropped to the lowest level in 22 years, another Bloomberg survey showed.
Output from the 12-member Organization of Petroleum Exporting Countries slid 87,000 barrels, or 0.3 percent, to an average 32.092 million barrels a day from a revised 32.179 million in September, according to the survey of oil companies, producers and analysts.
U.S. Jobs
“There is still no direction in the oil market,” said Ken Hasegawa, a commodity-derivatives sales manager at Newedge Group in Tokyo. “Everyone is waiting for the jobs report tomorrow, so oil will be traded in a narrow range.”
U.S. employers probably added 125,000 workers in October, and the jobless rate increased to 7.9 percent from a three-year low of 7.8 percent reached in September, according to the median forecast of 87 economists surveyed by Bloomberg. The Labor Department is scheduled to release the monthly figures tomorrow at 8:30 a.m. in Washington.
Crude may decline in New York as the formation of a “shooting star” on the candlestick chart yesterday signals a possible change in price direction after two days of gains, according to data compiled by Bloomberg. Futures have technical support along the lower Bollinger Band, about $84.78 a barrel today.
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
