BLBG:Oil Trims Weekly Advance as U.S. Refineries Remain Shut
Oil fell for the first time in four days in New York, paring a weekly gain, as two refineries remained shut on the U.S. East coast in the aftermath of Hurricane Sandy. Brent crude slid a fifth day in London.
West Texas Intermediate futures declined as much as 0.6 percent after rising the most in three weeks yesterday. Phillips 66 and Hess Corp. (HES)’s New Jersey refineries, with a combined crude processing capacity of 308,000 barrels a day, remained shut four days after the Atlantic superstorm struck the area. A report today may show manufacturing in the euro area contracted for a 15th month, signaling weakening fuel demand.
“The steam has really come off the oil market,” Soozhana Choi, the head of Asia commodities research at Deutsche Bank AG in Singapore, said in an interview on Bloomberg Television’s “On the Move Asia.” There’s “a lot of concern in the market that you’re going to see a dampening effect on economic activity because of the storm, and consequently oil demand,” she said.
Crude for December delivery fell as much as 53 cents to $86.56 a barrel in electronic trading on the New York Mercantile Exchange and was at $86.73 at 3:25 p.m. Singapore time. It advanced 85 cents to $87.09 yesterday, the highest close since Oct. 22. Prices are up 0.5 percent this week, trimming the year’s decline to 12 percent.
Brent oil for December settlement was at $108.08 a barrel, down 9 cents, on the London-based ICE Futures Europe exchange. The European benchmark crude grade was at a $21.35 premium to West Texas Intermediate. The gap narrowed by the most in the two weeks yesterday, shrinking $1.38 to $21.08.
Refinery Restarts
Restarts at the Phillips and Hess refineries are contingent on post-storm assessments, according to the companies. Both were closed before Sandy hit and lost power after the storm made landfall Oct. 29 in southern New Jersey. Phillips reported flooding in low-lying areas at Linden and said Oct. 31 the refinery regained power.
A final reading euro-area manufacturing today based on surveys of purchasing managers by London-based Markit Economics probably dropped to 45.3 for October, matching a preliminary estimate last month, according to a Bloomberg survey. That would be the lowest level in two months and the 15th month below 50, the dividing line between expansion and contraction.
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
